Chapter Two

RECRUITMENT AND PLACEMENT

TOPICS PER SYLLABUS

II.
RECRUITMENT AND PLACEMENT
A. Recruitment of local and migrant workers
1. Illegal recruitment (Sec. 5, R.A. No. 10022)
a) License vs. authority
b) Essential elements of illegal recruitment
c) Simple illegal recruitment
d) Illegal recruitment in large scale
e) Illegal recruitment as economic sabotage
f) Illegal recruitment vs. estafa
g) Liabilities
(i) Local recruitment agency
(ii) Foreign employer
(a) Theory of imputed knowledge (iii)
Solidary liability
h) Pre-termination of contract of migrant worker
2. Direct hiring
B. Regulation and enforcement
1. Suspension or cancellation of license or authority (Art. 35, Labor Code)
2. Regulatory and visitorial powers of the DOLE secretary
3. Remittance of foreign exchange earnings
4. Prohibited activities

A.
RECRUITMENT OF
LOCAL AND MIGRANT WORKERS

1. INTRODUCTION.
The Syllabus speaks of recruitment of:
1. Local workers; and
2. Migrant or overseas Filipino workers (OFWs) .
Notably, the rules are different for the two (2) situations mentioned above. Hence, discussion herein
shall be divided in accordance with these two classifications.

I.
RECRUITMENT AND PLACEMENT
FOR LOCAL EMPLOYMENT1
1. DEFINITION OF IMPORTANT TERMS.
The following definitions are relevant to the rules governing local employment:
1. “Private Recruitment and Placement Agency (PRPA) ” or “Agency” refers to any
individual, partnership, corporation or entity engaged in the recruitment and placement of
persons for local employment.
2. “PRPA Branch” refers to any extension office of a licensed PRPA.
 3. “Representative” refers to a person acting as an agent of a licensed PRPA registered with
the Regional Office and granted Authority in the recruitment of persons for local
employment.
4. “Recruitment and Placement” refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for local employment, whether for profit or not;
provided, that any person or entity which in any manner, offers or promises employment
for a fee, to two (2) or more persons shall be deemed engaged in recruitment and
placement.
5. “Recruit” refers to any individual promised, contracted, or enlisted for employment for a
fee.
6. “License” refers to the certificate issued by the DOLE authorizing an individual,
partnership, corporation, or entity to operate a private recruitment and placement agency.
7. “Authority to Operate Branch Office” refers to the document granted by the DOLE
authorizing the licensed PRPA to establish and operate a branch office.
8. “Authority to Recruit” refers to the document granted by the DOLE Regional Office
authorizing a person to conduct recruitment activities in the region.
9. “Licensee” refers to any person or entity duly licensed and authorized by the DOLE to
operate a private recruitment and placement agency.
10. “Recruitment Contract” refers to the agreement entered into between a licensed PRPA
or its authorized representative and a recruit stating clearly the terms and conditions of the
recruitment in a language known and understood by the recruit.
11. “Employment Contract” refers to the agreement entered into between the employer and
a recruit stating clearly the terms and conditions of the employment in a language known
and understood by the recruit.
12. “Placement Fee” refers to the amount charged by a PRPA from a recruit as payment for
placement services.
13. “Service Fee” refers to the amount charged by a PRPA from an employer as payment for
employment services.2
2. APPLICATION/RENEWAL OF LICENSE OF PRIVATE RECRUITMENT AND
PLACEMENT AGENCY FOR LOCAL EMPLOYMENT.
a. Qualifications.
An applicant for a license to operate a private recruitment and placement agency must possess the
following:
1. Must be a Filipino citizen, if single proprietorship. In case of a partnership or a corporation, at
least seventy-five percent (75%) of theauthorized capital stock must be owned and controlled by Filipino
citizens;

2. Must have a minimum net worth of P200,000.00 in the case of single proprietorship and
partnership or a minimum paid-up capital of P500,000.00 in the case of a corporation.
3. The owner, partners or the officers of the corporation must be of good moral character and not
otherwise disqualified by law;
4. Must have an office space with a minimum floor area of fifty (50) square meters. 3
b. Place to file application.
Application for license shall be filed with the Regional Office having jurisdiction over the
place where the applicant wishes to establish its main office.4
c. Requirements for application.
The applicant for a license shall submit a duly accomplished application form, and in support
thereof, the following requirements:
a. A filing fee of One Thousand Pesos (P1,000.00) ; if single proprietor; and P3,000 if
corporation or partnership;
 b. Certified copy of the Certificate of Registration of firm or business name from the
Department of Trade and Industry (DTI) , in the case of single proprietorship; or a certified
copy of the Articles of Partnership or Incorporation duly registered with the Securities and
Exchange Commission (SEC) , in the case of a partnership or a corporation;
c. A sworn statement of assets and liabilities and/or a duly audited financial statement, as the
case may be;
d. Owner's certificate/title of office location or contract of lease of office space for at least two
(2) years;
e. NBI clearance of the applicant, or the partners in the case of a partnership or all the officers
and members of the Board of Directors, in the case of a corporation;
f. Income Tax Returns for the last two (2) years;
g. A verified undertaking that the applicant shall:
(1) not engage in the recruitment of children below 15 years of age or place children below
18 years old in hazardous occupation in accordance with R.A No. 7610, as amended by
R.A. No. 7658, and other related laws; and
(2) assume full responsibility for all claims and liabilities which may arise in connection
with the use of the license;
h. Organizational structure and list of all officers and personnel with their respective bio-data,
two (2) passport-size ID pictures and a detailed description of their duties and
responsibilities; and
i. Specific address and location map of the office/proposed office;
j. List of all authorized representatives, if any, who must be at least high school graduate, with
their corresponding bio-data, two (2) passport-size ID pictures, high school diploma or
other proof of educational attainment duly authenticated, NBI clearance and Special Power
of Attorney (SPA) .
No application shall be accepted, unless all the requirements have been complied with.5
d. Action on the application.
1. Upon receipt of the application, the Regional Director or his duly authorized representative
shall evaluate the documents submitted and conduct an ocular inspection of the applicant's
office;
2. Within fifteen (15) working days after the ocular inspection, the Regional Director shall act
on the application, and immediately notify the applicant of the action taken; and
3. Applications which do not meet the requirements set forth in the rules shall be denied.6
e. Posting of cash and surety bonds and payment of license fee. - Prior to the approval of the
license, the applicant shall post cash and surety bonds of Twenty-Five Thousand Pesos (P25,000.00)
and One Hundred Thousand Pesos (P100,000.00) respectively, valid for two (2) years and then pay a license
of Six Thousand Pesos (P6,000.00) . The bonds shall answer for all valid and legal claims arising from the
illegal use of the license and shall likewise guarantee compliance with the provisions of the Labor Code and
its implementing Rules.
In case of loss of license, the licensee shall pay Six Hundred Pesos (P600.00) as payment for
the issuance of a certified copy of the license upon presentation of proof of loss.7
f. Publication. - The Agency shall publish once in a newspaper of general circulation the
license number of the agency, names and pictures of authorized representatives within fifteen (15) days
from the issuance of the license and shall submit a copy of said publication to the DOLE.8
g. Validity of the license. - The license shall be valid all over the Philippines for two (2) years
from the date of issuance, upon submission of proof of publication, unless sooner suspended, cancelled
or revoked by the DOLE Regional Director.9
h. Non-transferability. - No license shall be transferred, conveyed or assigned to any other
person or entity.10
i. Display of license. - The original license or a copy shall be displayed conspicuously at all
times in the office premises of the PRPA.11
j. Renewal of license. - An application for renewal of license shall be filed not later than
thirty (30) days before expiration of the same. No agency shall be allowed to renew its license if it has
been convicted by the regular courts for violation of the Labor Code, as amended, and its implementing
Rules, or if its license has been previously revoked.12
k. Requirements for renewal. - The Agency shall submit its existing license together with
the requirement specified in the Rules.13
l. Change of ownership. - Any Agency which desires to transfer ownership shall surrender its
license to the issuing Regional Office.14
m. Change of business address. - An Agency which desires to transfer to a new business
address shall notify the Regional Office which issued the license at least thirty (30) working days prior
to the intended date of transfer. It shall likewise notify the Regional Office which has jurisdiction over
the new business address and submit a sketch of the new office and a copy of the contract of lease, if
any.15
3. GRANTING/RENEWAL OF AUTHORITY TO RECRUIT, RECRUITMENT
PROCEDURE, PLACEMENT AND OTHER RELATED ACTIVITIES.
a. Authority to recruit. - A licensed Agency or its authorized representative shall secure an
authority to recruit from the DOLE Regional Office having jurisdiction over the place where
recruitment activities will be undertaken. Such authority shall be co¬terminus with the license unless
sooner revoked/cancelled by the issuing DOLE Regional Office or terminated by the Agency.16
b. Documents required. - The following documents shall be submitted by the
applicant/agency for the issuance/renewal of an Authority to Recruit:
1) Letter request by the Agency;
2) Copy of current license;
3) Certification under oath of licensee of the proposed recruitment activities of the
representative;
4) NBI clearance and bio-data of the representative with two (2) ID pictures; Clearance from
previous agency, if applicable; and
5) Previous Authority to Recruit, in case of renewal.
No application shall be accepted unless all the requirements have been complied with.17
c. Action on the application for the issuance/renewal of an Authority to Recruit.
1) Within ten (10) working days from receipt of complete documents, the Regional
Director shall act on the application;
2) In case of denial, the Regional Director shall state the reasons for denial;
A new application/renewal may be denied on any of the following grounds:
Non-compliance with the requirements;
Applicant's record of unresolved illegal recruitment case; or presence of any pending case
against the applicant and/or the agency.
3) Upon approval of application/renewal, the applicant shall pay a fee of P1,500.00 to the
Regional Office concerned.18
d. Recruitment by representative. - Only representatives duly authorized to recruit and
whose names are registered with the Regional Office can engage in recruitment activities.19
e. Termination of authority of representatives. - The authority of the representatives may be
revoked or terminated by the Agency or cancelled by the issuing Regional Office.
The Agency shall publish in a newspaper of general circulation the names and pictures of
representatives whose authority have been revoked or terminated and the Regional Office shall be furnished
a copy of the said publication.
The Regional Office shall keep a record of the authorities issued, revoked or terminated.20
f. Steps to be followed in the recruitment of persons. - The following procedures shall be
followed by the licensed Agency or its duly authorized representative in the recruitment of persons;
 1. The Agency or its duly authorized representative shall present to the Public Employment
Service Office (PESO) , Provincial and District Office where the recruitment activity is to
be undertaken, a copy of existing license, and original copy of Authority to Recruit issued
by the Regional Office concerned.
2. The representative shall require the recruit to submit a copy each of the following:
a) Birth certificate from the local civil registrar; and
b) Medical certificate issued by a government physician or by a reputable private
medical practitioner.
3. The Agency or its authorized representative and the recruit shall enter into a recruitment
contract which should be duly notarized, a copy of which shall be submitted to the
Regional Office where recruitment activity was undertaken.
4. The Agency or its duly authorized representative shall submit a list of the names and
addresses of its recruits, together with copy of documents specified above, to the
Regional Office or the appropriate Provincial/District Office where recruitment was
undertaken for appropriate authentication and validation; copies of these documents shall
be furnished the Regional Office of destination of the recruit.
5. After the recruitment activity, the Regional Office of origin shall issue a certification to
the Agency or its duly authorized representative that the recruitment activity has been in
accordance with this Rule, copy furnished the Marine Police/Coast Guard/Philippine
National Police, as the case may be.
6. Provide the recruit with a stamped envelope and form indicating the name, address of
recruit and the name, address, telephone number of his/her employer to be sent to the
parent.
7. Prior to deployment, the Regional Office of origin shall notify the Regional Office of
destination of the arrival of the recruits, and the latter shall see to it that the terms and
conditions of the recruitment contract are followed strictly.21
g. Replacement of worker without cost. - An employer shall be entitled to replace a worker without
additional cost only once, within one (1) month from the first day the worker reported for work, on any of
the following grounds:
1. The worker is found to be suffering from an incurable or contagious disease as certified by
a competent physician;
2. The worker is physically or mentally incapable of discharging the minimum normal
requirements of the job, as specified in the employment contract; or
3. The worker abandons the job, voluntarily resigns, commits theft or any other acts
prejudicial to the employer.22
h. Refund of service fee. - The employer is entitled to a refund of seventy five (75%) percent
of the service fee if the Agency failed to provide a replacement after the lapse of one (1) month from
receipt of the request for the replacement based on any of the grounds enumerated above.23
i. Forfeiture of rights. - The employer is deemed to have forfeited his right for a replacement
without cost or refund of the service fee, if he failed to avail of the same within one (1) month from the
date of engagement of the worker.24
4. ESTABLISHMENT OF BRANCH OFFICE/RENEWAL OF AUTHORITY TO OPERATE
BRANCH OFFICE.
a. Establishment of Branch Office. - The application to establish a branch office shall be
filed with the Regional Office having jurisdiction over the place where the branch office is to be
established.25
b. Requirements. - A licensee who desires to establish a branch office shall submit the
following requirements:
1. Filing fee of One Thousand Pesos (P1,000.00) ;
2. Certified copy of the current license;
3. Organizational structure of the branch office, including duly notarized appointments;
 4. NBI clearance, bio-data and two (2) passport-size ID pictures of the branch manager and
staff members;
5. Certification that the branch office has office space with a minimum floor area of fifty (50)
square meters;
6. Certification that the licensee has no pending case with the Regional Office issuing the
license or where it has established branch office; and
7. List of all authorized representatives, if any, who must be at least high school graduate,
with their corresponding bio-data, two (2) passport-size ID pictures, high school diploma
or other proof of educational attainment, NBI clearance and Special Power of Attorney
(SPA) issued by the licensee.
No application shall be accepted, unless all the requirements have been complied with.26
c. Action on the application.
1. Upon receipt of the application, the Regional Director or his duly authorized representative
shall evaluate the documents submitted and conduct an ocular inspection of the PRPA
branch.
2. Within fifteen (15) working days from the date of filing, the Regional Director shall either
deny or approve the application and immediately notify the applicant of the action taken.27
d. Posting of additional surety bond and payment of registration fee. - Prior to approval of
the authority to establish a branch office, the licensee/applicant shall post an additional surety bond of
Fifty Thousand Pesos (P50,000.00) and pay a registration fee of Three Thousand Pesos (P3,000.00) .
In case of loss, the licensee shall pay Six Hundred Pesos (P600.00) as payment for the
issuance of a certified copy of the authority upon presentation of proof of loss.28
e. Validity of the Authority. - The authority to operate a branch office shall be co¬terminus
with the validity of the license of the Agency, subject to renewal upon submission of the original
authority and requirements provided for under Section 25 of the Rules (supra) , as well as the original
authority.29
5. PLACEMENT FEE, SERVICE FEE, AND OTHER CHARGES.
a. Placement fee. - A licensed PRPA may charge workers a placement fee which shall not
exceed twenty percent (20%) of the worker's first month's basic salary; in no case shall such fee be
charged prior to the actual commencement of employment.30
b. Service fee. - A licensed PRPA may charge employers a service fee which shall not exceed
twenty percent (20%) of the annual basic salary of the worker. In no case shall the service fee be
deducted from the worker's salary.31
c. Transportation. - Transportation expenses of the worker from the place of origin to the
place of work shall be charged against the employer, and shall in no case be deducted from the
worker's salary.32
d. Issuance of official receipt. - All payments made or fees collected by a licensed Agency
shall be covered by an official receipt indicating the amount paid and the purpose of such payment.33
6. SUSPENSION, REVOCATION/CANCELLATION OF LICENSE.
a. Grounds for suspension of a license. - Any of the following shall constitute a ground for
suspension of a license:
1. Violation of any of the provisions of the Rules;34
2. Violation of Department Order No. 21, Series of 1994, regarding publication of job
vacancies;
3. Non-issuance of official receipt for every fee collected;
4. Non-submission of monthly report as provided in the Rules;35
5. Charging or accepting directly or indirectly, any amount in excess of what is prescribed by
the Rules;
6. Disregard of lawful orders and notices issued by the DOLE Secretary or his duly authorized
representative; or
7. Non-observance of the procedures on recruitment as stated in the Rules.36
 b. Grounds for cancellation/revocation of a license. - Any of the following shall constitute a
ground for the cancellation/revocation of license:
1. Violation/s of the conditions of license;
2. Engaging in act or acts of misrepresentation for the purpose of securing a license or renewal
thereof;
3. Continuous operation despite due notice that the license has expired;
4. Incurring two (2) suspensions by a PRPA based on final and executory orders;
5. engaging in labor-only contracting as defined in Article 106 of the Labor Code, as
amended;
6. Recruitment and placement of workers in violation of R.A. No. 7610, as amended by R.A.
No. 7658;
7. Transferring, conveying or assigning of license/authority to any person or entity other than
the one in whose favor it was issued;
8. Violation of any of the provisions, particularly, Article 34 of the Labor Code, as amended,
and its Implementing Rules and Regulations.37
c. Table of penalties and fines. - The commission of any of the afore-cited grounds for
suspension, cancellation/revocation shall merit imposition of fine and penalties provided in the Table
of Penalties and Fines provided in the Rules.38
7. CESSATION OF OPERATION OF THE AGENCY/BRANCH.
a. Notice of closure of the Agency or its Branch. - The Agency or its branch office which
ceases to operate prior to the expiration of its license or its authority to operate shall notify the
Regional Office concerned, stating the justification for such closure, accompanied by the original
receipt of cash bond and the license, or the authority to operate, as the case may be.39
b. Refund of cash bond. - An Agency which voluntarily surrenders its license shall be
entitled to the refund of its deposited cash bond only after posting a surety bond of similar amount from
a bonding company accredited by the Insurance Commission. The surety bond is valid for three (3)
years from expiration of the license.40
II.
RECRUITMENT AND PLACEMENT
FOR OVERSEAS EMPLOYMENT
1. RELEVANT LAWS ON RECRUITMENT FOR OVERSEAS EMPLOYMENT.
1. The Labor Code;
2. Migrant Workers and Overseas Filipinos Act of 1995 [R. A. No. 8042], as amended by
R.A. No. 10022 (March 8, 2010) .
2. DEFINITION OF RELEVANT TERMS.
1. “Overseas Filipinos” refer to migrant workers, other Filipino nationals and their
dependents abroad.41
2. “Overseas Filipino Worker or Migrant Worker” refers to a person who is to be engaged, is
engaged, or has been engaged in a remunerated activity in a state of which he or she is not
a citizen or on board a vessel navigating the foreign seas other than a government ship
used for military or non-commercial purposes, or on an installation located offshore or on
the high seas. A “person to be engaged in a remunerated activity” refers to an applicant
worker who has been promised or assured employment overseas.42
3. “Regular/Documented Filipino Migrant Workers” refer to the following:
(a) Those who possess valid passports and appropriate visas or permits to stay and work in
the receiving country; and
(b) Those whose contracts of employment have been processed by the POEA, or
subsequently verified and registered on-site by the Philippine Overseas Labor Office
(POLO) , if required by law or regulation.43
4. “Seafarer” refers to any person who is employed or engaged in overseas employment in
any capacity on board a ship other than a government ship used for military or non-
 commercial purposes. The definition shall include fishermen, cruise ship personnel and
those serving on mobile offshore and drilling units in the high seas.44
5. “Skilled Filipino Workers” refer to those who have obtained an academic degree,
qualification, or experience, or those who are in possession of an appropriate level of
competence, training and certification, for the job they are applying, as may be determined
by the appropriate government agency.45
6. “Underage Migrant Workers” refer to those who are below 18 years or below the
minimum age requirement for overseas employment as determined by the DOLE
Secretary.46
7. “Overseas Filipino in Distress” refers to an overseas Filipino who has a medical, psycho-
social or legal assistance problem requiring treatment, hospitalization, counselling, legal
representation as specified in the Rules47 or any other kind of intervention with the
authorities in the country where he or she is found. 48
8. “Rehires” refer to land-based workers who renewed their employment contracts with the
same principal.49
3. PRIVATE (FEE-CHARGING) EMPLOYMENT AGENCY (PEA) .
A “Private Fee-Charging Employment Agency” or “Private Recruitment/Employment
Agency”refers to any person, partnership or corporation duly licensed by the DOLE Secretary to
engage in the recruitment and placement of workers for overseas employment for a fee which is
charged, directly or indirectly, from the workers or employers or both 50 or from the workers who
renewed their employment contracts with the same principal.51
4. PRIVATE RECRUITMENT ENTITY (PRE) .
A “private recruitment entity” refers to any person or association engaged in the
recruitment and placement of workers without charging, directly or indirectly, any fee from the
workers or employers.52
An example is a Filipino Service Contractor licensed as such to recruit workers for its
accredited projects or contracts overseas. 53 This being so, it will recruit and place workers without
charging any fee.
5. DISTINCTIONS BETWEEN PEA AND PRE.
A PEA technically may be distinguished from a PRE as follows:
1. A PEA has a right duly recognized in law to charge a fee, directly or indirectly, from the
workers or the employers or from both; while a PRE does not charge any fee either directly
or indirectly from the workers or employers to which they would be deployed;
2. The former is authorized to recruit only for overseas placement or deployment; while the
latter is allowed to recruit for both local and overseas deployment.
3. The former derives its authority to recruit and place workers from a document denominated
as a “license”; while the latter sources its authority from a document called “authority.” 54
6. ENTITIES AUTHORIZED TO ENGAGE IN RECRUITMENT AND PLACEMENT OF
WORKERS.
The following are authorized to engage in recruitment and placement of workers:
a. Public employment offices;
b. Philippine Overseas Employment Administration (POEA) ;
c. Private recruitment entities;
d. Private employment agencies;
e. Shipping or manning agents or representatives;
f. Such other persons or entities as may be authorized by the DOLE Secretary; and
g. Construction contractors.
7. OTHER RELEVANT TERMS.
 “Filipino Service Contractor” refers to any person, partnership or corporation duly licensed
as a private recruitment agency by the DOLE Secretary to recruit workers for its accredited projects
or contracts overseas.55
“Manning Agency” refers to any person, partnership or corporation duly licensed by the
DOLE Secretary to engage in the recruitment and placement of seafarers for ships plying international
waters and for related maritime activities.56
“Non-Licensee” refers to any person, partnership or corporation with no valid license to
engage in recruitment and placement of overseas Filipino workers or whose license is revoked,
cancelled, terminated, expired or otherwise delisted from the roll of licensed recruitment/manning
agencies registered with the POEA.57
“Placement Fees” refer to any and all amounts charged by a private recruitment
agency from a worker for its recruitment and placement services as prescribed by the DOLE
Secretary.58
8. TERMS OF EMPLOYMENT CONTRACT GOVERN THE EMPLOYMENT OF OFWs.
In cases involving employment of OFWs, the rights and obligations among and between the OFWs,
the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A
contract freely entered into is considered the law between the parties and, therefore, should be respected. In
formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public
policy.
9. RULES AFFECTING OVERSEAS EMPLOYMENT MAKE A DISTINCTION BETWEEN
LAND-BASED OVERSEAS WORKERS AND SEAFARERS.
The rules on overseas employment are divided into two, namely:
1. POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers;59 and
2. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers.60
The obvious intent for the two (2) separate issuances is to distinguish between the rules
applicable to land-based overseas workers and those applicable to seafarers (formerly termed
as “seamen”) . This is as it should be because of the unique and peculiar distinguishing features of maritime
employment.
II-A.
LICENSING AND REGULATION
FOR OVERSEAS RECRUITMENT AND PLACEMENT
1. QUALIFICATIONS.
Only those who possess the following qualifications may be permitted to engage in the business
of recruitment and placement of overseas Filipino workers:
1. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of
the authorized capital stock of which is owned and controlled by Filipino citizens;
2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single
proprietorship or partnership and a minimum paid-up capital of Two Million Pesos
(P2,000,000.00) in case of a corporation; Provided, that those with existing licenses shall,
within four (4) years from effectivity hereof, increase their capitalization or paid up
capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two
Hundred Fifty Thousand Pesos (P250,000.00) every year; and
3. Those not otherwise disqualified by law or other government regulations to engage in the
recruitment and placement of workers for overseas employment.61
2. DISQUALIFICATIONS.
The following are not qualified to engage in the business of recruitment and placement of Filipino
workers overseas:
a. Travel agencies and sales agencies of airline companies;
 b. Officers or members of the Board of any corporation or members in a partnership engaged
in the business of a travel agency ;
c. Corporations and partnerships, when any of its officers, members of the board or partners,
is also an officer, member of the board or partner of a corporation or partnership engaged
in the business of a travel agency ;
d. Persons, partnerships or corporations which have derogatory records, such as, but not
limited to, the following:
1) Those certified to have derogatory record or information by the NBI or by the Anti-
Illegal Recruitment Branch of the POEA;
2) Those against whom probable cause or prima facie finding of guilt for illegal
recruitment or other related cases exists;
3) Those convicted for illegal recruitment or other related cases and/or crimes involving
moral turpitude; and
4) Those agencies whose licenses have been previously revoked or cancelled by the POEA
for violation of R.A. No. 8042, the Labor Code (PD 442, as amended) , and their
implementing rules and regulations.
All applicants for issuance/renewal of license shall be required to submit clearances from
the NBI and Anti-Illegal Recruitment Branch of the POEA, including clearances for their
respective officers and employees.
e. Any official or employee of the DOLE, POEA, Overseas Workers Welfare Administration
(OWWA) , Department of Foreign Affairs (DFA) and other government agencies directly
involved in the implementation of R.A. No. 8042 and/or any of his/her relatives within the
fourth (4 ) civil degree of consanguinity or affinity; and
th

f. Persons or partners, officers and directors of corporations whose licenses have been
previously cancelled or revoked for violation of recruitment laws.62
3. PROVISIONAL LICENSE.
Applicants for new license shall be issued a provisional license which shall be valid for a
limited period of one (1) year within which the applicant should be able to comply with its undertaking
to deploy one hundred (100) workers to its new principal. The license of a complying agency shall be
upgraded to a full license entitling it to another three (3) years of operation. Non-complying agencies
will be notified of the expiration of their license.63
4. VALIDITY OF THE LICENSE.
Except in case of a provisional license, every license shall be valid for four (4) years from the
date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine
law, the Rules and other pertinent issuances. Such license shall be valid only at the place/s stated
therein and when used by the licensed person, partnership or corporation.64
5. NON-TRANSFERABILITY OF LICENSE.
No license shall be transferred, conveyed or assigned to any person, partnership or
corporation. It shall not be used directly or indirectly by any person, partnership or corporation other than the
one in whose favor it was issued.
In case of death of the sole proprietor and to prevent disruption of operation to the prejudice
of the interest of legitimate heirs, the license may be extended upon request of the heirs, to continue
only for the purpose of winding up the business operations.65
7. CHANGE OF OWNERSHIP/RELATIONSHIP OF SINGLE PROPRIETORSHIP OR
PARTNERSHIP.
Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment shall cause the automatic revocation of the license.
A change in the relationship of the partners in a partnership duly licensed to engage in
overseas employment which materially interrupts the course of the business or results in the actual
dissolution of the partnership shall likewise cause the automatic revocation of the license.66
8. UPGRADING OF SINGLE PROPRIETORSHIPS OR PARTNERSHIPS.
License holders which are single proprietorships or partnerships may, subject to the guidelines
of the POEA, convert into corporations for purposes of upgrading or raising their capabilities to
respond adequately to developments/ changes in the international labor market and to enable them to
better comply with their responsibilities arising from the recruitment and deployment of workers
overseas.
The approval of merger, consolidation or upgrading shall automatically revoke or cancel the
licenses of the single proprietorships, partnerships or corporations so merged, consolidated or
upgraded.67
9. DEROGATORY RECORD AFTER ISSUANCE/RENEWAL OF LICENSE.
The license of a single proprietorship or a partnership shall be suspended until cleared by the
POEA should any derogatory record be found to exist against the single proprietorship or any or all of
the partners, as the case may be. The appointment of any officer or employee of any licensed agency
may be cancelled or revoked at any time with due notice to the agency concerned, whenever said
officer or employee is found to have any derogatory record.68
10. APPOINTMENT/CHANGE OF OFFICERS AND PERSONNEL.
Every appointment of agents or representatives of a licensed agency shall be subject to prior
approval or authority of the POEA. The acknowledgment or approval may be issued upon submission of or
compliance with the following:
a. Proposed appointment or special power of attorney;
b. Clearances of the proposed representative or agent from the NBI and Anti-Illegal
Recruitment Branch of the POEA; and
c. Sworn or verified statement by the designating or appointing person or company assuming
full responsibility for all acts of the agent or representative done in connection with the
recruitment and placement of workers.
Every change in the composition of the Board of Directors of a corporation, appointment or
termination of officers and personnel shall be registered with the POEA within thirty (30) calendar days
from the date of such change. The agency shall be required to submit the minutes of proceedings duly
certified by the SEC in case of election of new members of the Board of Directors with their biodata, ID
pictures and clearances.
The POEA reserves the right to deny the acknowledgment or appointment of officers,
employees and representatives who were directly involved in recruitment irregularities.69
11. PUBLICATION OF CHANGE OF DIRECTORS/OTHER OFFICERS AND
PERSONNEL; REVOCATION OR AMENDMENT OF APPOINTMENT OF
REPRESENTATIVES.
In addition to the requirement of registration with and submission to the POEA, every change
in the membership of the Board of Directors, termination for cause of other officers and personnel,
revocation or amendment of appointment of representatives shall be published at least once in a
newspaper of general circulation, in order to bind third parties. Proof of such publication shall be
submitted to the POEA.70
12. TRANSFER OF BUSINESS ADDRESS.
Any transfer of business address shall be effected only with prior authority or approval of the
POEA. The approval shall be issued only upon formal notice of the intention to transfer with the
following attachments:
a. In the case of a corporation, a Board Resolution duly registered with the SEC authorizing
the transfer of business address; and
b. Copy of the contract of lease or proof of building ownership.
The new office shall be subject to the regular ocular inspection procedures by duly authorized
representatives of the POEA.
A notice to the public of the new address shall be published in a newspaper of general
circulation.71
13. ESTABLISHMENT OF ADDITIONAL/EXTENSION OFFICES.
Additional/extension offices may be established subject to the prior approval of the POEA.72
14. CONDUCT OF RECRUITMENT OUTSIDE OF REGISTERED OFFICE.
 No licensed agency shall conduct any provincial recruitment, jobs fair or recruitment activities
of any form outside of the address stated in the license or approved additional office(s) without first
securing prior authority from the POEA.73
15. RENEWAL OF LICENSE.
An agency shall submit an application for the renewal of its license on or before its expiration. Such
application shall be supported by the following documents:
a. Renewed or revalidated surety bond amounting to One Hundred Thousand Pesos
(P100,000.00) ;
b. Renewed escrow agreement in the amount of P1,000,000.00 with a commercial bank to
primarily answer for valid and legal claims of recruited workers as a result of recruitment
violations or money claims;
c. Audited financial statements for the past two (2) years with verified corporate or individual
tax returns. In case the equity of the agency is below the minimum capitalization
requirement, it shall be given thirty (30) days from release of the renewed license to submit
proof(s) of capital infusion, such as SEC certification of such infusion or bank certification
corresponding to the amount infused and treasurer‟ s affidavit duly received by the SEC.
Otherwise, the license shall be suspended until it has complied with the said requirement;
d. Clearances from the NBI and the POEA Anti-Illegal Recruitment Branch for the Board of
Directors and responsible officers; and
e. Other requirements as may be imposed by the POEA.74
16. NON-EXPIRATION OF LICENSE.
Where the license holder has made timely and sufficient application for renewal, the existing
license shall not expire until the application shall have been finally determined by the POEA. For this
purpose, an application shall be considered sufficient if the applicant has substantially complied with
the requirements for renewal.75
1.
ILLEGAL RECRUITMENT
(Section 5, R.A. No. 10022)
1. CONCEPT OF ILLEGAL RECRUITMENT.
The term “illegal recruitment” is defined as any recruitment activities, including the
prohibited practices enumerated under Article 34 of the Labor Code, to be undertaken by non-licensees
or non-holders of authority.76 Based on paragraph [a] of Article 38,77 illegal recruitment as defined
therein, in relation to Articles 13 [b]78 and 3479 and penalized under Article 3980 of the Labor Code,
may be committed only by non-licensees or non-holders of authority.
R.A. No. 8042, otherwise known as the “Migrant Workers and Overseas Filipinos Act of
1995,” as amended,81 and its Implementing Rules, have broadened this concept of illegal recruitment
as far as overseas placement and recruitment activities are concerned. Consequently, the acts described
in the following provision of this law82 that may be committed by any person, constitute illegal
recruitment, regardless of whether such person is a non-licensee, non-holder, licensee or holder of
authority:
“SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
or procuring workers and includes referring, contract services, promising
or advertising for employment abroad, whether for profit or not, when
undertaken by non-licensee or non-holder of authority contemplated under
Article 13(f) 83 of Presidential Decree No. 442, as amended, otherwise known as
the Labor Code of the Philippines: Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
(a) To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of
 Labor and Employment, or to make a worker pay or acknowledge any
amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or
authority under the Labor Code, or for the purpose of documenting hired
workers with the POEA, which include the act ofreprocessing workers
through a job order that pertains to non-existent work, work different from the
actual overseas work, or work with a different employer whether registered or
not with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to
liberate a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency or who has
formed, joined or supported, or has contacted or is supported by any union or
workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
(g) To fail to submit reports on the status of employment,placement vacancies,
remittance of foreign exchange earnings, separation from jobs,
departures and such other matters or information as may be required by the
Secretary of Labor and Employment;
(h) To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the
Department of Labor and Employment;
(i) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged intravel
agency or to be engaged directly or indirectly in the management of
travel agency;
(j) To withhold or deny travel documents from applicant
workers beforedeparture for monetary or financial considerations, or for any
other reasons, other than those authorized under the Labor Code and its
implementing rules and regulations;
(k) Failure to actually deploy a contracted worker without valid reason as
determined by the Department of Labor and Employment;
(l) Failure to reimburse expenses incurred by the worker in connection with
his documentation and processing for purposes of deployment, in cases
where the deployment does not actually take place without the worker's
fault. Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage; and
(m) To allow a non-Filipino citizen to head or manage a licensed
recruitment/manning agency.” 84

(a)
LICENSE VS. AUTHORITY
“License” refers to the document issued by the DOLE Secretary authorizing a person,
partnership or corporation to operate a private recruitment/manning agency.85
 “Authority” refers to the document issued by the DOLE Secretary authorizing the officers,
personnel, agents or representatives of alicensed recruitment/manning agency to conduct recruitment
and placement activities in a place stated in the license or in a specified place.86
(b)
ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT
The essential elements of illegal recruitment vary in accordance with the following
classifications:
(1) Simple illegal recruitment;
(2) When committed by a syndicate; or
(3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered
an offense involving economic sabotage.87
These classifications are discussed below, in accordance with the presentation in the Syllabus.
(c)
SIMPLE ILLEGAL RECRUITMENT
1. TWO (2) ELEMENTS.
According to the 2011 case of Delia D. Romero v. People,88 the two (2) elements of the crime
of simple illegal recruitment are:
(1) The offender has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and
(2) He undertakes either any activity within the meaning of “recruitment and
placement” defined under Article 13(b) ,89 or any prohibited practices enumerated under
Article 3490 of the Labor Code.91
2. FIRST ELEMENT: NON-LICENSEE OR NON-HOLDER OF AUTHORITY.
Under the first element, a “non-licensee” or “non-holder of authority” is any person,
corporation or entity which has not been issued a valid license or authority to engage in recruitment
and placement by the DOLE Secretary, or whose license or authority has been suspended, revoked or
cancelled by the POEA or the DOLE Secretary.92
The acts mentioned in Article 13(b) of the Labor Code can lawfully be undertaken only by
licensees or holders of authority to engage in the recruitment and placement of workers.93
As far as agents or representatives appointed by licensees or holders of authority are
concerned, they shall be considered as falling within the ambit of the term “non-licensee” or “non-
holder of authority” if their appointments were not previously authorized by the POEA. Consequently,
their activities shall be considered illegal recruitment.94
Non-possession of a license to recruit is, under the law, an essential ingredient of the crime of
illegal recruitment penalized under the Labor Code.95
A person who promised a job placement abroad to another, for a consideration, when he is not
duly licensed nor authorized to engage in recruitment, is criminally liable for illegal recruitment.96
Any person, whether a non-licensee, non-holder, licensee or holder of authority, may be
held liable for illegal recruitment. Under R.A. No, 8042, as amended by R.A. No. 10022,
license or authority of the illegal recruiter is immaterial.
Under R.A. No. 8042, the crime of illegal recruitment may be committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority. Even with a license or authority,
illegal recruitment could still be committed under Section 6 [supra] of said law.97 It is clear that under
this law, in order to prove illegal recruitment, there is no need to establish whether the accused is a
licensee or holder of authority or not because it is no longer an element of the crime.98
Recruiter may be a natural or juridical person.
Accused-appellant in People v. Saulo, 99 contends that he could not have committed the
crime of illegal recruitment in large scale since Nancy Avelino, a labor and employment officer at the
POEA, testified that licenses for recruitment and placement are issued only to corporations and not to
natural persons. Holding that this argument is specious and illogical, the Supreme Court ratiocinated
that any person, whether natural or juridical, that engages in recruitment activities without the
necessary license or authority shall be penalized under Article 39100 of the Labor Code.
3. SECOND ELEMENT: PERFORMANCE OF RECRUITMENT AND PLACEMENT
ACTIVITIES.
The phrase “recruitment and placement” refers to the acts described in paragraph [b] of Article
13 of the Labor Code, viz:
“[b] „Recruitment and placement‟ refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers or promises
for a fee, employment to two or more persons shall be deemed engaged in recruitment
101
and placement.”
4. SOME PRINCIPLES ON ILLEGAL RECRUITMENT.
Mere impression that a person could deploy workers overseas is sufficient to constitute illegal
recruitment.102 But if no such impression is given, the accused should not be convicted for illegal
recruitment.103
Mere promise or offer of employment abroad amounts to recruitment.104
There is no need to show that accused represented himself as a licensed recruiter.105
Referrals may constitute illegal recruitment.106
It is illegal recruitment to induce applicants to part with their money upon false
misrepresentations and promises in assuring them that after they paid the placement fee, jobs
abroad were waiting for them and that they would be deployed soon.107
Recruitment whether done for profit or not is immaterial.108
The act of receiving money far exceeding the amount as required by law is not considered
as “recruitment and placement” as this phrase is contemplated under the law.109
Actual receipt of fee is not an element of the crime of illegal recruitment.110
Conduct of interviews amounts to illegal recruitment.111
Absence of receipt is not essential to hold a person guilty of illegal recruitment.112
Conviction for illegal recruitment may be made on the strength of the testimonies of the
complainants.113
Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for
illegal recruitment.114
Only one person recruited is sufficient to convict one for illegal recruitment.115
Non-prosecution of another suspect is immaterial.116
Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal
liability for illegal recruitment.117
Defense of denial cannot prevail over positive identification.118 Positive identification where
categorical and consistent and not attended by any showing of ill motive on the part of the
eyewitnesses on the matter prevails over alibi and denial.119 Between the categorical statements
of the prosecution witnesses, on the one hand, and bare denials of the accused, on the other hand,
the former must prevail.120

Conspiracy in illegal recruitment cases, how proved.

Conspiracy to defraud aspiring OFWs is evident from the acts of the malefactors whose
conduct before, during and after the commission of the crime clearly indicated that they were one in
purpose and united in its execution. Direct proof of previous agreement to commit a crime is not
necessary as it may be deduced from the mode and manner in which the offense was perpetrated, or
inferred from the acts of the accused pointing to a joint purpose and design, concerted action and
community of interest. As such, all the accused are equally guilty of the crime of illegal recruitment
since in a conspiracy, the act of one is the act of all.121 To reiterate, in establishing conspiracy, it is not
essential that there be actual proof that all the conspirators took a direct part in every act. It is sufficient
that they acted in concert pursuant to the same objective.122
(d)
 ILLEGAL RECRUITMENT IN LARGE SCALE

(e)
ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE123
These two (2) topics shall be discussed jointly in view of their close interrelation.
1. ILLEGAL RECRUITMENT, WHEN CONSIDERED A CRIME INVOLVING ECONOMIC
SABOTAGE.
Illegal recruitment is considered a crime involving economic sabotage when the commission
thereof is attended by the following qualifying circumstances:
1. when committed by a syndicate; or
2. when committed in large scale.
2. ILLEGAL RECRUITMENT COMMITTED BY A SYNDICATE.
Illegal recruitment is deemed committed by a syndicate if it is carried out by a group of three
(3) or more persons conspiring or confederating with one another.
Elements of illegal recruitment by a syndicate.
The essential elements of the crime of illegal recruitment committed by a syndicate are as
follows:
1. There are at least three (3) persons who, conspiring and/or confederating with one another,
carried out any unlawful or illegal recruitment and placement activities as defined under
Article 13(b) or committed any prohibited activities under Article 34 of the Labor Code;
and
2. Said persons are not licensed or authorized to do so, either locally or overseas.124
The law, it must be noted, does not require that the syndicate should recruit more than one (1)
person in order to constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1)
person would suffice to qualify the illegal recruitment act as having been committed by a syndicate.125
3. ILLEGAL RECRUITMENT IN LARGE SCALE.
Illegal recruitment is deemed committed in large scale if committed against three (3) or more
persons individually or as a group .
Elements of illegal recruitment in large scale.
The elements of illegal recruitment in large scale, as distinguished from simple illegal
recruitment, are as follows:
1. The accused engages in the recruitment and placement of workers as defined under Article
13(b) 126 or committed any prohibited activities under Article 34127 of the Labor Code; and
2. The accused commits the same against three (3) or more persons, individually or as a
group.128
Distinguished from illegal recruitment by a syndicate.
As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in
large scale may be committed by only one (1) person. What is important as qualifying element is that
there should be at least three (3) victims of such illegal recruitment, individually or as a group.129
4. SOME PRINCIPLES ON ILLEGAL RECRUITMENT INVOLVING ECONOMIC
SABOTAGE.
The number of persons victimized is determinative of the crime. A conviction for large scale
illegal recruitment must be based on a finding in each case of illegal recruitment of three (3) or
more persons having been recruited, whether individually or as a group.130
Failure to prove at least 3 persons recruited makes the crime a case of simple illegal
recruitment.131
There is no illegal recruitment in large scale based on several informations filed by only one
complainant.132
The number of offenders is not material in illegal recruitment in large scale.133
 Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.134
(f)
ILLEGAL RECRUITMENT VS. ESTAFA
1. A PERSON, FOR THE SAME ACT AND ON THE BASIS OF SAME EVIDENCE, MAY BE
CHARGED AND CONVICTED SEPARATELY FOR BOTH ILLEGAL RECRUITMENT
AND ESTAFA.
The crime of estafa is defined under paragraph 2(a) of Article 315 of the Revised Penal Code,
viz:
“Article 315. Swindling (estafa) . - Any person who shall defraud another by any
means mentioned hereinbelow…
xxx
“2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions; or by
means of other similar deceits.”
The elements of estafa in general are: (1) that the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary estimation
is caused to the offended party or third person.135
Deceit is the false representation of a matter of fact, whether by words or conduct, by false or
misleading allegations, or by concealment of that which should have been disclosed; and which
deceives or is intended to deceive another so that he shall act upon it, to his legal injury.
The 2010 case of People v. Gallo, 136 best illustrates the case where the accused-appellant was
convicted not only for illegal recruitment but also for estafa because all the elements of estafa are present:
the accused-appellant, together with the other accused at large, deceived the complainants into
believing that the agency had the power and capability to send them abroad for employment; that there
were available jobs for them in Korea as factory workers; that by reason or on the strength of such
assurance, the complainants parted with their money in payment of the placement fees; that after
receiving the money, accused-appellant and his co-accused went into hiding by changing their office
locations without informing complainants; and that complainants were never deployed abroad.
2. CONVICTION UNDER THE LABOR CODE DOES NOT PRECLUDE CONVICTION FOR
ESTAFA OR OTHER CRIMES UNDER OTHER LAWS.
In cases where some other crimes or felonies like estafa are committed in the process of illegal
recruitment, conviction under the Labor Code does not preclude punishment under other
statutes.137 Illegal recruitment is penalized under the Labor Code138 which is a special law, and not
under the Revised Penal Code.139
It bears emphasis, however, that not all acts which constitute the felony of estafa under the
Revised Penal Code necessarily establish the crime of illegal recruitment under the Labor Code. Estafa
is wider in scope and covers deceits whether related or not related to recruitment activities.140
3. SOME PRINCIPLES ON ILLEGAL RECRUITMENT AND ESTAFA AS SEPARATE
CRIMES.
 Same evidence to prove illegal recruitment may be used to prove estafa.141
 Conviction for both illegal recruitment and estafa, not double jeopardy.142

(g)
LIABILITIES
(i) LOCAL RECRUITMENT AGENCY (ii)
FOREIGN EMPLOYER
(a) Theory Of Imputed Knowledge
(iii) SOLIDARY LIABILITY
In view of their close interrelation, the above topics shall be discussed hereunder jointly.

1. LIABILITY FOR MONEY CLAIMS.

 “Joint and several liability” is the nature of the liability of the principal/employer and the
recruitment/manning agency, for any and all claims arising out of the implementation of the
employment contract involving Filipino workers for overseas deployment. This liability is required to
be incorporated in the contract for overseas employment and is a condition precedent for its
approval.143
If the recruitment/manning agency is a juridical being, the corporate officers and directors or
partners, as the case may be, shall themselves be jointly and severally liable with the corporation or
partnership for the aforesaid claims and damages.144
Such liabilities shall continue during the entire period or duration of the employment contract
and shall not be affected by any substitution, amendment or modification made locally or in a foreign
country of the said contract.145
Relevant cases.
Jurisprudence has already affirmed the validity of said provision on joint and solidary liability.
The 2004 case of Phil. Employ Services and Resources, Inc. v. Paramio,146 ruled that under
147
the law, the agency which deployed the employees whose employment contracts were adjudged
illegally terminated, is jointly and solidarily liable with the principal for the money claims awarded to
the aforesaid employees which consist of the payment of the salaries due to the OFWs corresponding to
the unexpired portion of their contract as well as the reimbursement of their placement fees.
However, in order to hold the officers of the agency solidarily liable, it is required that there
must be proof of their cculpability therefor. Thus, in the 2012 case of Hon. Sto. Tomas v.
Salac,148 while the Supreme Court has affirmed the constitutionality of the last sentence of the
2 paragraph of Section 10, R.A. 8042, which states: “If therecruitment/placement agency is a
nd

juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and damages,” it ruled in this wise:
“But the Court has already held, pending adjudication of this case, that the liability of
corporate directors and officers is not automatic. To make them jointly and solidarily liable
with their company, there must be a finding that they were remiss in directing the affairs of
that company, such as sponsoring or tolerating the conduct of illegal activities. In the case
of Becmen and White Falcon, while there is evidence that these companies were at fault in
not investigating the cause of Jasmin‟s death, there is no mention of any evidence in the
case against them that intervenors Gumabay, et al. , Becmen‟s corporate officers and
directors, were personally involved in their company‟s particular actions or omissions in
Jasmin‟s case.
“As a final note, R.A. 8042 is a police power measure intended to regulate the
recruitment and deployment of OFWs. It aims to curb, if not eliminate, the injustices and
abuses suffered by numerous OFWs seeking to work abroad. The rule is settled that every
statute has in its favor the presumption of constitutionality. The Court cannot inquire into the
wisdom or expediency of the laws enacted by the Legislative Department. Hence, in the
absence of a clear and unmistakable case that the statute is unconstitutional, the Court
must uphold its validity.”
The above ruling was reiterated in the 2013 case of Gagui v. Dejero, 149 where the Court of
Appeals affirmed the finding of the NLRC that petitioner Elizabeth M. Gagui, although not impleaded
in the original complaints filed by respondents,150 is solidarily liable with the placement agency, PRO
Agency Manila, Inc. , to pay respondents all the money claims awarded by virtue of their illegal
dismissal. The CA cited Section 10 of R.A. 8042 in stating that there was “no need for petitioner to be
impleaded xxx because by express provision of the law, she is made solidarily liable with PRO Agency
Manila, Inc. , for any and all money claims filed by private respondents. ” The Supreme Court upheld
petitioner‟ s contention based on its earlier ruling in Hon. Sto. Tomas v. Salac,151 that while it is true that
R.A. 8042 and the Corporation Code provide for solidary liability, this liability must be so stated in the
decision sought to be implemented. Absent this express statement, a corporate officer may not be
impleaded and made to personally answer for the liability of the corporation.
Some principles on money claims of OFWs.

Solidary liability exists even if the foreign principal is a foreign government

instrumentality; immunity from suit cannot be invoked to defeat the solidary nature of the
liability.152
 Extension of term of employment of OFW without knowledge of local agent does not
bind the latter.153
Effect on liability of severance of relations between local agent and foreign
principal. Even if the recruitment agency and the foreign principal had already severed
their agency agreement at the time the worker was injured, the recruitment agency may
still be sued for violation of the employment contract if no notice of the termination of the
agency‟ s agreement with its foreign principal was given to the OFW, pursuant to Article
1921 of the Civil Code which states that if the agency has been entrusted for the purpose
of contracting with specified persons, its revocation shall not prejudice the latter if they
were not given notice thereof.154
Previous owner remains liable to its employees even if there is an undertaking to
assume responsibility by the new owner. The liability of the former owner of the
recruitment agency is not extinguished by an undertaking made by the new owner thereof
assuming responsibility therefor. Such undertaking does not bind the employees as would
release the former from its liability to the latter.155
2. Liability for illegal recruitment.
The persons criminally liable for illegal recruitment are:
1. In case of natural persons
a. Principals;
b. Accomplices; and
c. Accessories.
2. In case of juridical persons
a. Officers having ownership, control, management or direction of their business who are
responsible for the commission of the offense; and
b. Responsible employees/agents thereof.156
Some principles on the persons liable for illegal recruitment.
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as
principal by direct participation, together with his employer, if it is shown that he
actively and consciously participated in illegal recruitment.157
2. Good faith and merely following orders of superiors are not valid defenses of an
employee.158
3. A manager of a recruitment/manning agency is not a mere employee. As such, he
receives job applications, interviews applicants and informs them of the agency‟ s
requirement of payment of performance or cash bond prior to the applicant‟ s
deployment. As the crewing manager, he was at the forefront of the company‟ s
recruitment activities.159
Administrative liability of licensee or holder of authority, separate and distinct from
criminal liability for illegal recruitment.
The institution of the criminal action is without prejudice to any administrative action against
the licensee or holder of authority cognizable by the POEA which could proceed independently of the
criminal action.160
(a)
THEORY OF IMPUTED KNOWLEDGE
The theory of imputed knowledge is a rule that any information material to the transaction, either
possessed by the agent at the time of the transaction or acquired by him before its completion, is deemed to be
the knowledge of the principal, at least insofar as the transaction is concerned, even though the knowledge,
in fact, is not communicated to the principal at all.
“Imputed knowledge” means the knowledge attributed to a party because of his position, or
his relationship with or responsibility for another party. Such knowledge is attributed for the reason
that the facts in issue were open to discovery and it was that person's duty to apprise him of such
facts.161
 CIT Group/Equipment Financing, Inc. v. Roberts,162 observed that “knowledge of one
person is generally only imputed to another where there exists a special legal relationship between the
two, such as where the knowledge of an agent may be imputed to the principal, the knowledge of an
attorney is imputed to his client, or the knowledge of one partner in a partnership is imputed to all the
partners. Even in those relationships, though, imputation of knowledge may only be found under
certain circumstances. The theory, known as the “'imputed knowledge rule,” upon which imputation
of knowledge from an agent to its principal rests is that, when the agent acts within the scope of the
agency relationship, there is identity of interests between the principal and agent. The presumption
upon which imputation rests is that the agent will perform his duty and communicate to his principal
the facts that the agent acquires while acting within the scope of the agency relationship.”
The relationship of the local recruitment/manning agency vis-a-vis its foreign principal is that
of agent-principal, the former being the agent and the latter, the principal. Consequently, the theory of
imputed knowledge ascribes the knowledge of the agent to the principal but not the other way
around.
Thus, the violations of the terms and conditions of an extension contract, the execution of which
the local recruiter did not know and did not consent to, shall not make said local recruiter solidarily
liable for the reason that knowledge by his foreign principal of said contract cannot be imputed to him.
Sunace International Management Services, Inc. v. NLRC,163 where the High Court has
the opportunity to discuss the application of the theory of imputed knowledge. Here, the OFW (Divina)
, a domestic helper in Taiwan, has extended her 12-month contract, after its expiration, for two (2)
more years after which she returned to the Philippines. It was established by evidence that the
extension was without the knowledge of the local recruitment agency, petitioner Sunace. The Court of
Appeals, however, affirmed the Labor Arbiter‟ s and NLRC‟ s finding that Sunace knew of and
impliedly consented to the extension of Divina‟ s 2-year contract. It went on to state that “It is
undisputed that [Sunace] was continually communicating with [Divina‟ s] foreign employer. ” It thus
concluded that “[a]s agent of the foreign principal, „petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic) employment contract
necessarily bound it. ‟ ”
In finding that the application by the CA of this theory of imputed knowledge was misplaced,
the High Court ruled that this theory ascribes the knowledge of the agent, Sunace, to the principal,
employer Xiong, not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent, Sunace. There being no substantial proof that Sunace knew of and
consented to be bound under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, Sunace and its owner cannot be held solidarily liable for any of Divina‟ s claims
arising from the 2-year employment extension. As the New Civil Code provides: “Contracts take effect
only between the parties, their assigns, and heirs, except in case where the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or by provision of
law. ”164
Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment contract,
the foreign principal directly negotiated with Divina and entered into a new and separate employment
contract with her in Taiwan. Article 1924 of the New Civil Code reading: “The agency is revoked if the
principal directly manages the business entrusted to the agent, dealing directly with third persons” thus
applies.
As defined, a “principal” refers to an employer or foreign placement agency hiring or
engaging Filipino workers for overseas employment through a licensed private recruitment/manning
agency.165
(h)
PRE-TERMINATION OF CONTRACT OF MIGRANT WORKER
1. WHY THE TERM USED IS “PRE-TERMINATION” AND NOT SIMPLY
“TERMINATION” OF CONTRACT.
The syllabus uses the term “pre-termination” in describing the termination of employment of
OFWs. This is understandable in the light of the prevailing rule that an OFW‟ s employment contract is always
for a fixed term and thus, he can never acquire regularity of employment. Being fixed-term, any termination
prior to its expiration is more appropriately to be considered and denominated as “pretermination” and not
simply “termination” of employment.
2. VARIOUS FORMS OF PRE-TERMINATION.
Pre-termination of employment may mean any of the following:
1. The OFW has requested for an early termination of employment;
2. The OFW and his employer mutually agreed on an early termination of employment;
3. The OFW has been discharged for just cause or disciplinary reasons or authorized cause;
4. The OFW suffered injury or illness; or
5. The OFW has died.
3. TOPICAL DISCUSSION.
For an orderly presentation, the disquisition on this particular topic in the syllabus shall be in
accordance with the following order:
(1) Nature of Employment of OFWs;
(2) Pre-termination by the OFWs and Its Effects;
(3) Pre-termination by the Employer and Its Consequences;
(4) Award of Monetary Claims and Damages to OFWs; and
(5) Claims for Disability and Death Benefits of OFWs.
I
NATURE OF EMPLOYMENT OF OFWs
1. OFWs CAN NEVER ACQUIRE REGULAR EMPLOYMENT.
The prevailing rule is that OFWa are contractual, not regular, employees. In fact, they can never
attain regularity of employment.
The case of Brent School, Inc. v. Zamora,166 was the first to declare that OFWs are not
covered by the term “regular employment” as defined in Article 280 of the Labor Code.
Coyoca v. NLRC,167 more pointedly enunciated the rule that the employment of Filipino
seamen is governed by the Rules and Regulations of the POEA168 which states that the contract of
seafarers shall be for a fixed period. In no case should their contract be longer than twelve (12)
months.
The 2002 Resolution on the Motion for Reconsideration in the case of Millares v.
NLRC,169 which reversed its first ruling in the same case promulgated on March 14, 2000,170 clearly
cited as reason for its holding that OFWs cannot acquire regular employment, the fact that their
employment is governed by the contracts they sign everytime they are re-hired and their employment is
terminated when the contract expires. Their employment is contractually fixed for a certain period of
time.171

2. SOME RELEVANT PRINCIPLES.

Consequent to the above rulings, the following principles are worth noting:

1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit

provision of the POEA Rules and Regulations on fixed-period employment.172

2. OFWs do not become regular employees by reason of nature of work, that is, that they are
made to perform work that is usually necessary and desirable in the usual business or
trade of the employer. The exigencies of their work necessitate that they be employed
on a contractual basis.173 This notwithstanding the fact that they have rendered more
than twenty (20) years of service.174

3. Regular employment does not result from the series of re-hiring of OFWs.175
4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor
foreign employers. It is for the mutual interest of both the seafarer and the employer why
 the employment status must be contractual only or for a certain period of time. Seafarers
spend most of their time at sea and understandably, they cannot stay for a long and an
indefinite period of time at sea. Limited access to shore society during the employment
will have an adverse impact on the seafarer. The national, cultural and lingual diversity
among the crew during the contract of employment is a reality that necessitates the
limitation of its period.176
5. The expiration of the employment contracts of OFWs marks its ending.177
3. EFFECT OF HIRING OF SEAFARER FOR OVERSEAS EMPLOYMENT BUT
ASSIGNING HIM TO LOCAL VESSEL.
In point is OSM Shipping Philippines, Inc. v. NLRC,178 where the petitioner does not deny
hiring private respondent Guerrero as master mariner. However, it argues that since he was not
deployed overseas, his employment contract became ineffective because its object was allegedly
absent. Petitioner contends that using the vessel in coastwise trade and subsequently chartering it to
another principal had the effect of novating the employment contract. The Supreme Court was not
persuaded by this argument. Contrary to petitioner‟ s contention, the contract had an object which was
the rendition of service by private respondent on board the vessel. The non-deployment of the ship
overseas did not affect the validity of the perfected employment contract. After all, the decision to use
the vessel for coastwise shipping was made by petitioner only and did not bear the written conformity
of private respondent. A contract cannot be novated by the will of only one party. The claim of
petitioner that it processed the contract of private respondent with the POEA only after he had started
working is also without merit. Petitioner cannot use its own misfeasance to defeat his claim.
4. EFFECT ON THE STATUS OF A SEAFARER HIRED FOR OVERSEAS DEPLOYMENT
BUT LATER ASSIGNING HIM TO DOMESTIC OPERATIONS AFTER THE
EXPIRATION OF HIS OVERSEAS CONTRACT.

The case of Delos Santos v. Jebsen Maritime, Inc. ,179 presents a situation different from the
said case of OSM Shipping. The husband of petitioner, Gil Delos Santos, was hired by respondent
Jebsen Maritime, Inc. , for and in behalf of Aboitiz Shipping Co. , as third engineer of MV Wild Iris. The
POEA-approved contract of employment was for a fixed period of one (1) month and for a specific
undertaking of conducting said vessel to and from Japan. On the vessel’s return to the Philippines a
month after, Delos Santos remained on board, respondent having opted to retain his services while
the vessel underwent repairs in Cebu. After its repair,MVWild Iris, this time renamed/registered as
MV Super RoRo 100, sailed within domestic waters, having been meanwhile issued by the Maritime
Industry Authority a Certificate of Vessel Registry and a permit to engage in coastwise trade on the
Manila-Cebu-Manila-Zamboanga-General Santos-Manila route. During this period of employment,
Delos Santos was paid by and received from respondent his salary in Philippine peso. Later, Delos
Santos got sick and filed a complaint with the Labor Arbiter for recovery of disability benefits, and sick
wage allowance and reimbursement of hospital and medical expenses.
The principal issue to be resolved boils down to which between the POEA-Standard
Employment Contract (POEA-SEC) and the Labor Code, governs the employer-employee relationship
between Delos Santos and respondent after MV Wild Iris, as later renamed Super RoRo 100, returned to the
country from its one-month conduction voyage to and from Japan.
The Supreme Court ruled that the POEA-SEC should no longer apply after the expiration of
the one-month contract which was doubtless fixed to coincide with the pre-determined one-month long
Philippines-Japan-Philippines conduction-voyage run. After the lapse of the said period, his
employment under the POEA-approved contract may be deemed as functus oficio and Delos Santos‟
employment pursuant thereto considered automatically terminated, there being no mutually-agreed
renewal or extension of the expired contract. After said period, Delos Santos ceased to be an OFW as
his employment on board an inter-island vessel should already be considered as domestic employment.
5. EFFECT OF NON-DEPLOYMENT OF OFWs TO OVERSEAS ASSIGNMENT.
 Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc. 180 was not deployed
overseas despite the signing of a POEA-approved employment contract.181 One of his contentions is
that such failure to deploy was an act designed to prevent him from attaining the status of
a regular employee. The Supreme Court, however, disagreed and ruled that “seafarers are considered
contractual employees and cannot be considered as regular employees under the Labor Code. Their
employment is governed by the contracts they sign every time they are rehired and their employment is
terminated when the contract expires. The exigencies of their work necessitate that they be employed
on a contractual basis.”
II
PRE-TERMINATION BY OFWS AND ITS EFFECTS
1. EFFECT WHEN OFW PRE-TERMINATES HIS EMPLOYMENT.
When the voluntary pre-termination of the employment contract is initiated by the employee, it is akin
or equivalent to voluntary resignation, a form of termination by employee of his employment contract under
Article 285 of the Labor Code. However, if the employer fails to present evidence of voluntariness, say the
resignation letter, the employee is deemed illegally dismissed.
Skippers United Pacific, Inc. v. Doza. 182 - In this case, there was no written notice furnished
to respondent seafarers regarding the cause of their dismissal. Cosmoship MV Wisdom, their foreign
employer, furnished a written notice (telex) to Skippers, the local manning agency, claiming that
respondents were repatriated because the latter voluntarily pre-terminated their contracts. This telex was
given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pretermination of
the employment contract “akin to resignation” and no illegal dismissal. However, as correctly ruled by the
CA, the telex message is “a biased and self-serving document that does not satisfy the requirement of
substantial evidence. ” If, indeed, respondents voluntarily pre-terminated their contracts, then they should
have submitted their written resignations.
2. CONCEPT OF RESIGNATION UNDER THE LABOR CODE, APPLICABLE TO OFWs.
Article 285183 of the Labor Code recognizes termination by the employee of the employment
contract by “serving written notice on the employer at least one (1) month in advance. ” Given that
provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written
resignation, it is safe to presume that the employer terminated the seafarers.
3. CONCEPT OF INVOLUNTARY RESIGNATION OR CONSTRUCTIVE DISMISSAL
UNDER THE LABOR CODE, APPLICABLE TO OFWS.
(NOTE: Please see discussion on this point under the topic “IV. TERMINATION OF
EMPLOYMENT, xxx E. Constructive Dismissal”, infra)

III
PRE-TERMINATION OF EMPLOYMENT OF OFWs
AND ITS CONSEQUENCES
1. OFWs DESERVE TO BE PROTECTED BY OUR LAWS.
OFWs belong to a disadvantaged class. Most of them come from the poorest sector of our
society. Their profile shows they live in suffocating slums, trapped in an environment of crimes.
Hardly literate and in ill health, their only hope lies in jobs they can hardly find with difficulty in our
country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will
climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of
despondence, they will work under sub-human conditions and accept salaries below the minimum. The
least we can do is to protect them with our laws.184
There is an extreme need for the strict enforcement of the law and the rules and regulations
governing Filipino contract workers abroad. Many hapless citizens of this country who have sought
foreign employment to earn a few dollars to ensure for their families a life worthy of human dignity
and provide proper education and a decent future for their children have found themselves enslaved by
foreign masters, harassed or abused and deprived of their employment for the slightest cause. No one
should be made to unjustly profit from their suffering. Hence, recruiting agencies must not only
faithfully comply with government-prescribed responsibilities; they must impose upon themselves the
duty, borne out of a social conscience, to help citizens of this country sent abroad to work for foreign
principals. They must keep in mind that this country is not exporting slaves but human beings, and
above all, fellow Filipinos seeking merely to improve their lives.185
2. OFWS AND THEIR FOREIGN EMPLOYERS MAY FREELY ENTER INTO A
CONTRACT OF EMPLOYMENT.
A contract freely entered into is considered the law between the parties who can establish
stipulations, clauses, terms and conditions as they may deem convenient, including the laws which they
wish to govern their respective obligations, as long as they are not contrary to law, morals, good
customs, public order or public policy.186
3. PARTY INVOKING THE FOREIGN LAW HAS THE BURDEN TO PROVE IT;
APPLICATION OF THE DOCTRINE OF PROCESSUAL PRESUMPTION.
The hornbook principle is that the party invoking the application of a foreign law has the
burden of proving the law, under the doctrine ofprocessual presumption. 187
“Presumed-identity approach” or “processual presumption” is an International Law doctrine
which dictates that where a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as Philippine law. Thus, under this situation, Philippine
labor laws should apply in determining the issues presented in a case.188
It must be noted that the Philippines does not take judicial notice of foreign laws; hence, they
must not only be alleged, they must be proven. To prove a foreign law, the party invoking it must
present a copy thereof and comply with Sections 24189 and 25190 of Rule 132 of the Revised Rules of
Court.
In the 2010 case of ATCI Overseas Corporation v. Echin,191 petitioners contend that
Philippine labor laws on probationary employment are not applicable since it was expressly provided
in respondent‟ s employment contract which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and Regulations as in fact
POEA Rules accord respect to such rules, customs and practices of the host country. To prove the
Kuwaiti law, petitioners submitted the following: MOA between respondent and her foreign employer,
the Ministry of Public Health of Kuwait (the Ministry) , as represented by ATCI, which provides that
the employee is subject to a probationary period of one (1) year and that the host country‟ s Civil
Service Laws and Regulations apply; a translated copy (Arabic to English) of the termination letter to
respondent stating that she did not pass the probation terms, without specifying the grounds therefor,
and a translated copy of the certificate of termination, both of which documents were certified by Mr.
Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular Affairs Islamic
Certification and Translation Unit; and respondent‟ s letter of reconsideration to the Ministry, wherein
she noted that in her first eight (8) months of employment, she was given a rating of “Excellent” albeit
it changed due to changes in her shift of work schedule.
The Supreme Court, however, ruled that these documents, whether taken singly or as a whole,
do not sufficiently prove that respondent was validly terminated as a probationary employee under Kuwaiti
civil service laws. Instead of submitting a copy of the pertinent Kuwaiti labor laws duly authenticated and
translated by Embassy officials thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA and the termination letter which
does not prove at all that Kuwaiti civil service laws differ from Philippine laws and that under such Kuwaiti
laws, respondent was validly terminated.
4. DUE PROCESS.
a. In the absence of proof of applicable foreign law, OFWs are entitled to due process in
accordance with Philippine laws.
As a general rule, in the absence of proof of the applicable laws of the foreign employer, it is
the provisions of the Labor Code which govern termination of employment of OFWs. This was the
holding in the case of EDI-Staffbuilders International, Inc. v. NLRC,192 where no proof of theSaudi
laws was presented. In such absence, Philippine labor laws and regulations shall govern the
relationship between the OFW and his employer. Our laws and rules on the requisites of due process
relating to termination of employment should therefore apply.193
 In Philemploy Services and Resources, Inc. v. Rodriguez,194 the respondent employee was
hired as a domestic helper in Taiwan under a one-year contract, with 40 days probationary period
before she would become a regular domestic helper. Terminated after ten (10) days of work, she filed
an illegal dismissal case. The Supreme Court affirmed the validity of her termination within the
probationary period but noted that the twin requirements of notice and hearing were not observed.
Respondent is therefore entitled to the award of P30,000.00 as nominal damages for failure to observe
due process.
b. Due process in case of termination of employment of seafarers.
195
PCL Shipping Philippines, Inc. v. NLRC. - Contrary to petitioners’ contention that the twin
requirements of notice and hearing apply strictly only when the employment is within the Philippines
and that the same need not be strictly observed in cases of international maritime or overseas
employment, the provisions of the Constitution as well as the Labor Code which afford protection to
labor apply to Filipino employees whether working within the Philippines or abroad. Moreover, the
principle of lex loci contractus (the law of the place where the contract is made) governs in this
jurisdiction.
Talidano v. Falcon Maritime & Allied Services, Inc. ,196 also declares that the minimum
requirement of due process in termination proceedings must be complied with even with respect to
seamen on board a foreign vessel.197
Centennial Transmarine, Inc. v. Dela Cruz,198 however, is more categorical in declaring
that for officers and crew who are working in foreign vessels involved in overseas shipping, there must
be compliance with the applicable laws on overseas employment as well as with the regulations issued
by the POEA, such as those embodied in the Standard Contract for Seafarers Employed Abroad
(Standard Contract) .199

Skippers Pacific, Inc. v. Mira,200 instructs that under the said Standard Contract, the “two-
notice rule” is indicated. An erring seafarer is given a written notice of the charge against him and is
afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written
notice of penalty and the reasons for it should be furnished the erring seafarer. It is only in the
exceptional case of clear and existing danger to the safety of the crew or vessel that the required
notices are dispensed with; but just the same, a complete report should be sent to the manning
agency, duly supported by substantial evidence of the findings.201
5. AWARD OF INDEMNITY IN THE FORM OF NOMINAL DAMAGES IN CASE OF
DISMISSAL OF OFWs FOR JUST OR AUTHORIZED CAUSEBUT WITHOUT DUE
PROCESS.
The Agabon doctrine202 of awarding indemnity in the form of nominal damages in cases of
valid termination for just or authorized cause203 butwithout procedural due process also applies to
termination of OFWs. The amount of indemnity of P30,000.00 was awarded in DMA Shipping
Philippines, Inc. v. Cabillar,204 and P10,000.00 in the case of PCL Shipping Philippines, Inc. v.
NLRC. 205
Most relevant to cite as example on this poinr is the 2011 case of Dela Rosa v. Michaelmar
Philippines, Inc. ,206 which applied Agabonsince petitioner was not accorded procedural due process
prior to his termination. There was no showing here that respondents complied with the required
procedural due process. The only notice allegedly given to Dela Rosa was a letter warning dated March
16, 2003. Such letter, however, did not cite the particular acts constituting Dela Rosa‟ s alleged poor
performance. Likewise, there was no formal investigation of the charges. Certainly, respondents failed to
observe the necessary procedural safeguards. Consequently, petitioner was awarded P30,000.00 as
indemnity in the form of nominal damages in accordance with the ruling in Agabonbecause his
dismissal was for just cause but without due process.
6. ONUS PROBANDI.
 a. Burden of proof devolves on both recruitment agency and its foreign principal.
In termination cases, where the employer-employee relationship has been established,
the onus probandi (burden of proof) that the dismissal of an employee is for a just cause, lies with the
employer. Failure to do so would necessarily mean that the dismissal is not justified.207
Because of the joint and solidary nature of the liability of the foreign-based employer and the
local recruitment agency, the burden of proof to show that the dismissal of the OFW is legal and valid
devolves upon the both of them.208
b. Quantum of evidence required.
A fact is deemed established in cases filed before administrative or quasi-judicial bodies like
the NLRC or POEA, if it is supported by substantial evidence. They are not bound by the technical
rules of procedure and evidence and the rules obtaining in the courts of law. Their proceedings are non-
litigious in nature.209
IV
AWARD OF MONETARY CLAIMS AND DAMAGES TO OFWs
1. THE RELIEFS UNDER ARTICLE 279 OF THE LABOR CODE ARE NOT AVAILABLE TO
OFWs; LEGAL BASIS FOR THEIR RELIEFS IS SECTION 10, R.A. NO. 8042, AS
AMENDED.
Any and all money claims arising from the employment of OFWs, including those for death,
disability or illness benefits, are not rooted in the Labor Code.210 It is R.A. No. 8042, otherwise known
as the “Migrant Workers and Overseas Filipinos Act of 1995,”211 and not Article 279212 of the Labor
Code, which is the appropriate legal basis for such claims, thus:
“SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damage. Consistent with this mandate, the
NLRC shall endeavor to update and keep abreast with the developments in the global services
industry.
“The liability of the principal/employer and the recruitment/placement agency for any
and all claims under this section shall be joint and several . This provision shall be
incorporated in the contract for overseas employment and shall be a condition precedent for its
approval. The performance bond to be filed by the recruitment/ placement agency, as provided by
law, shall be answerable for all money claims or damages that may be awarded to the workers.
If the recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
“Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification made locally or in a
foreign country of the said contract.
“Any compromise/amicable settlement or voluntary agreement on money claims
inclusive of damages under this section shall be paid within thirty (30) days from approval of the
settlement by the appropriate authority.
“In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement of his placement fee
and the deductions made with interest at twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3) months for every year of
the unexpired term, whichever is less.
“In case of a final and executory judgement against a foreign employer/principal, it shall be
automatically disqualified, without further proceedings, from participating in the Philippine Overseas
Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies
the judgement award.
“Non-compliance with the mandatory periods for resolutions of case provided under this
section shall subject the responsible officials to any or all of the following penalties:
“(a) The salary of any such official who fails to render his decision or resolution within
the prescribed period shall be, or caused to be, withheld until the said official complies
therewith;
 “(b) Suspension for not more than ninety (90) days; or
“(c) Dismissal from the service with disqualification to hold any appointive public office for
five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice to any
liability which any such official may have incurred under other existing laws or rules and
regulations as a consequence of violating the provisions of this paragraph.”

A plain reading of said Section 10 of R.A. No. 8042 readily shows that it applies only to cases
of illegal dismissal or dismissal without any just, authorized or valid cause and finds no application in
cases where the OFW was not illegally dismissed.213
To reiterate, the remedies under Article 279, such as reinstatement or separation pay in lieu of
reinstatement or full backwages, are not available to OFWs. This is as it should be since OFWs are
contractual employees whose rights and obligations are governed primarily by the POEA Standard
Employment Contract (POEA-SEC) , the Rules and Regulations Governing Overseas Employment and
more importantly, by said R.A. No. 8042, as lately amended by R.A. No. 10022.214
2. A VALIDLY DISMISSED OFW IS NOT ENTITLED TO HIS SALARY FOR THE
UNEXPIRED PORTION OF HIS EMPLOYMENT CONTRACT.
An OFW who is dismissed from employment for a valid cause is not entitled to any salary for
the unexpired portion of his employment contract. However, if he is dismissed without observance of
procedural due process, he is entitled to an indemnity in the form of nominal damages.215
3. THE SERRANO DOCTRINE: ILLEGALLY DISMISSED OFWs ARE NOW ENTITLED TO
ALL THE SALARIES FOR THE ENTIRE UNEXPIRED PORTION OF THEIR
EMPLOYMENT CONTRACTS, IRRESPECTIVE OF THE STIPULATED TERM OR
DURATION THEREOF.
Prior to the Serrano doctrine which was enunciated in the en banc ruling in the 2009 case
of Antonio M. Serrano v. Gallant Maritime Services, Inc. ,216 the following provision of
the 5 paragraph of Section 10 of R.A. No. 8042 which is again quoted below for ready reference,viz:
th

“In case of termination of overseas employment without just, valid or authorized cause as
defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the
worker shall be entitled to the full reimbursement of his placement fee and the deductions made with
interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term,
whichever is less. ”
has been interpreted to mean that the entitlement to monetary claims of an illegally dismissed OFW
depends on the duration of his contract.217Basically, the rule then may be stated as follows:
1. If the duration of the employment contract is less than one (1) year , an illegally dismissed
OFW shall be entitled to all his salaries for the unexpired portion thereof;218 or
2. If the duration of the employment contract is at least one (1) year219 or more,220 an
illegally dismissed OFW shall be entitled to“whichever is less” between his “salaries for
the unexpired portion of his employment contract” or his salaries“for three (3) months for
every year of the unexpired term.” 221
The foregoing rule has been rendered nugatory by the Serrano rulingwhich declared the afore-
quoted qualification - “or for three months for every year of the unexpired term, whichever is less” in
paragraph 5, Section 10 of R.A. No. 8042 null and unconstitutional for being discriminatory and
violative of the equal protection of the law clause, among other significant reasons cited therein, thusly:
“The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a
3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on
the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.”
Consequent to the Serrano ruling, an illegally dismissed OFW is now entitled to all the
salaries for the entire unexpired portion of their employment contracts, irrespective of the stipulated
term or duration thereof.222 Resultantly, all past decisions subjecting the monetary award to the afore-
mentioned qualifying clause no longer apply.
4. SERRANO DOCTRINE GIVEN RETROACTIVE EFFECT.
 The Serrano doctrine was given retroactive effect in the 2011 case of Yap v. Thenamaris
Ship’s Management,223 which was pending before the Supreme Court when the Serrano ruling was
promulgated.
5. THE PROBLEM IS THE SAME UNCONSTITUTIONAL RULE WAS REPLICATED IN THE
AMENDATORY R.A. NO. 10022 (MARCH 8, 2010) .
Despite the 2009224 en banc declaration of the Supreme Court in Serrano that the said
qualifying provision in the 5 paragraph of Section 10 of R.A. No. 8042 is unconstitutional, R.A. No.
th

10022 that was passed in 2010225 to amend the said 5 paragraph still contained the same qualifying
th

provision.
The insistence by Congress on this provision despite its earlier declaration of
unconstitutionality and nullity, certainly creates a constitutional issue. Did such replication result in curing
its patent nullity and unconstitutionality?
In the light of the rationale behind such pronouncement of unconstitutionality and nullity which
was eloquently ventilated and articulated inSerrano, it is opined that such replication does not operate to cure
the nullity and unconstitutionality of the provision. Notably, the very raison d etrefor so nullifying it cannot be
wiped out by the simple expedience of re-enacting it in the new law.
6. REFUSAL OF SUPREME COURT TO RULE ON THE CONSTITUTIONALITY OF
AMENDMENT TO THE 5 PARAGRAPH INTRODUCED BY R.A. NO. 10022.
TH

The Supreme Court, in the following cases, refused to rule on the constitutionality of the
amendment by R.A. No. 10022 of the 5 paragraph of Section 10 of R.A. No. 8042:
th

(1) The 2012 case of Skippers United Pacific, Inc. v. Doza, 226 where the said
unconstitutionality was invoked and cited and the amendatory reiteration of the same provision was
acknowledged. “Nevertheless,” said the Supreme Court, “since the termination occurred on January 1999
before the passage of the amendatory RA 10022, we shall apply RA 8042, as unamended, without
touching on the constitutionality of Section 7 of RA 10022.”
(2) In another 2012 case, Pert/CPM Manpower Exponent Co. , Inc. v. Vinuya, 227 the
recruitment agency posits that the Serrano ruling has been nullified by R.A. No. 10022. It argues that
R.A. 10022, which lapsed into law (without the signature of the President) on March 8, 2010, restored
the subject clause in the 5 paragraph, Section 10 of R.A. 8042. It was, however, held that this
th

argument fails to persuade. Laws shall have no retroactive effect, unless the contrary is provided. By its
very nature, the amendment introduced by R.A. 10022 restoring a provision of R.A. 8042 declared
unconstitutional cannot be given retroactive effect, not only because there is no express declaration of
retroactivity in the law, but because retroactive application will result in an impairment of a right that
had accrued to the respondents by virtue of the Serrano ruling - entitlement to their salaries for the
unexpired portion of their employment contracts. All statutes are to be construed as having only a
prospective application, unless the purpose and intention of the legislature to give them a retrospective
effect are expressly declared or are necessarily implied from the language used.228 There is thus no
reason to nullify the application of the Serrano ruling in the present case. Said the Supreme Court:
“Whether or not R.A. 10022 is constitutional is not for us to rule upon in the present case as this is an
issue that is not squarely before us. In other words, this is an issue that awaits its proper day in court; in
the meanwhile, we make no pronouncement on it.”
7. SOME PRINCIPLES ON MONETARY AWARDS TO OFWs.
Monetary award to OFW is not in the nature of separation pay or backwages but a form of
indemnity.229
Only salaries are to be included in the computation of the amount due for the unexpired portion of
the contract. Overtime, holiday and leave pay230 and allowances are not included.231 However, this
rule on exclusion of allowance does not apply in case it is encapsulated in the basic salary
clause.232
Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is concerned, the
correct criterion in determining whether or not sailors are entitled to overtime pay is not whether
they were on board and cannot leave ship beyond the regular eight (8) working hours a day, but
whether they actually rendered service in excess of said number of hours.233 An OFW is not
 entitled to overtime pay, even if guaranteed,234 if he failed to present any evidence to prove that he
rendered service in excess of the regular eight (8) working hours a day.235
In case of unauthorized deductions from OFW’s salary , he shall be entitled to the full
reimbursement of the deductions made with interest at twelve percent (12%) per annum. This is in
addition to the full reimbursement of his placement fee with the same interest of twelve percent
(12%) per annum plus his salaries for the unexpired portion of his employment contract if he is
terminated without just, valid or authorized cause as defined by law or contract.236
Costs of repatriation and transport of personal belongings should be included in the monetary
award to an illegally dismissed OFW.237
Right of the employer to recover cost of repatriation from OFW‟ s wages hinges on whether the
latter was legally or illegally dismissed. If validly discharged, employer has the right to recover
therefrom; otherwise, he cannot so recover.238
Unauthorized substitution or alteration of POEA-approved employment contract from the time of
actual signing thereof by the parties up to and including the period of their expiration without the
approval of the POEA is prohibited.239
Effect of a final and executory judgment against a foreign employer/principal. - It shall be
automatically disqualified, without further proceedings, from participating in the Philippine
Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgment award.240
8. OFWs ARE NOT ENTITLED TO THE RELIEFS OF BACKWAGES, REINSTATEMENT OR
SEPARATION PAY IN LIEU THEREOF.
OFWs are not entitled to backwages, reinstatement or separation pay in lieu thereof since
these reliefs provided under Article 279 of the Labor Code, as earlier pointed out, are not available to
them. Their employment being purely fixed term in character, they are entitled only to ALL the
salaries for the unexpired portion of their employment contract per Serrano doctrine.241
9. OFWs ARE ENTITLED TO ACTUAL OR COMPENSATORY DAMAGES.
In the following cases, the OFWs were awarded actual or compensatory damages because of the
failure of the recruitment agency to deploy them abroad, after signing a POEA-approved employment
contract, an act constitutive of breach of contract:
(1) Santiago v. CF Sharp Crew Management, Inc. ,242 where respondent recruitment agency
was held liable to pay petitioner actual and compensatory damages of US$4,635.00 in the form of the loss of
nine (9) months‟ worth of salary as provided in the contract.
(2) Bright Maritime Corporation v. Fantonial,243 where petitioner company was held liable
for actual damages for the loss of respondent‟ s one-year salary as provided in the contract.244
10. OFWs ARE ENTITLED TO MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY’S FEES.
Because of the attendant bad faith and breach of contract, an illegally dismissed OFW is
entitled to moral and exemplary damages and attorney‟ s fees. Additionally, because the OFW was
compelled to litigate and thus incur expenses to protect his rights and interests, he is entitled to
attorney‟ s fees equivalent to ten percent (10%) of the total award.245
Thus, in the same case of Bright Maritime, respondent, in addition to the actual and
compensatory damages, was awarded moral damages in the amount of P30,000.00,246 exemplary
damages of P50,000.00247 and 10% of all recoverable amounts as attorney‟ s fees.248
Similarly, based on the same grounds of breach of contract and bad faith, the respondent
in Athenna International Manpower Services, Inc. v. Villanos,249 was awarded P50,000 as moral
damages and P50,000 as exemplary damages, in addition to attorney‟ s fees of ten percent (10%) of the
aggregate monetary awards.250
11. OTHER REMEDIES AVAILABLE TO OFWs.
a. Repatriation as a remedy.
 Whatever ground is cited for the pre-termination of employment, the OFW has the right to
insist that he be repatriated to the Philippines. Theonly exception is when he is charged for certain
crimes or cases in foreign courts and thus may not be allowed to go home until the case is terminated in
his favor.
b. Repatriation when an OFW requests for early termination.
A seafarer who requests for early termination of his contract shall be liable for his repatriation
cost as well as the transportation cost of his replacement.251
c. Compulsory insurance policy covers repatriation due to illegal termination or death of
OFW.
The compulsory insurance policy coverage for an agency-hired OFW includes the payment of
repatriation cost of the worker when his employment is terminated by the employer without any valid cause,
or by the employee with just cause, including the transport of his personal belongings.
In case of death, the insurance provider shall arrange and pay for the repatriation or return of
the worker's remains.252
d. Proportionate return of premium for compulsory insurance coverage.
When the worker decides to voluntarily pre-terminate his employment contract abroad and
returns to the Philippines out of his own volition and free will, there shall be a proportionate amount of
return of premium for the benefit of the recruitment/manning agency corresponding to the unexpired
term of the insurance contract.253
V
CLAIMS FOR DISABILITY AND DEATH BENEFITS OF OFWs
1. ON JURISDICTION.
a. Labor Arbiters have jurisdiction over claims for disability, death and other benefits of
OFWs.
Being a money claim by their very nature which may have arisen out of an employer -
employee relationship or by virtue of a law or contract, the Labor Arbiters of the NLRC have
jurisdiction to hear and decide claims for disability, death and other benefits.
b. Labor Arbiter has jurisdiction even if the case is filed by the heirs of the deceased
OFW.
Medline Management, Inc. v. Roslinda,254 Contrary to the claim of petitioner, the Labor
Arbiter has jurisdiction to hear even if there is no employer-employee relationship between the parties
because herein respondents who filed the complaint, are the wife and son of Juliano Roslinda, the
deceased OFW. As heirs of Juliano Roslinda, they have the personality to file the claim for death
compensation, reimbursement of medical expenses, damages and attorney's fees before the Labor
Arbiter of the NLRC.
2. ON DISABILITY CLAIMS.
a. Disability, not similar to illness or sickness.
"Disability" is generally defined as the "loss or impairment of a physical or mental function
resulting from injury or sickness. " Clearly,"disability" is not synonymous
with "sickness" or "illness," the former being a potential effect of the latter.255
b. Claims of OFWs for disability, death and burial benefits, distinguished from similar
claims under the Labor Code.
The claims for disability, death and burial benefits involving seafarers or OFWs over which
the Labor Arbiters of the NLRC have jurisdiction, are not the same as the claims against the State
Insurance Fund under Title II, Book IV of the Labor Code for the same benefits, over which
the Employees‟ Compensation Commission (ECC) has jurisdiction. 256
c. The Labor Code’s concept of permanent total disability applies to claims of OFWs.
But as far as the permanent total disability of OFWs is concerned, the concept of this kind of
disability under Article 192 of the Labor Code is applicable to them.257
 The 2013 case of Kestrel Shipping Co. , Inc. v. Munar,258 declared that it is now well-settled
that the provisions of the Labor Code and Amended Rules on Employee Compensation (AREC)
implementing Title II, Book IV of the Labor Code on disabilities are applicable to the case of seafarers such
that the POEA-Standard Employment Contract (POEA-SEC) is not the sole issuance that governs their rights
in the event of work-related death, injury or illness.
d. Compensation and benefits for injury or illness.
The latest POEA-SEC issued in 2010259 prescribes the following compensation and benefits
for injury or illness:
SECTION 20. COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness
during the term of his contract are as follows:
1. The employer shall continue to pay the seafarer his wages during the time he is on
board the ship;
2. If the injury or illness requires medical and/or dental treatment in a foreign port,
the employer shall be liable for the full cost of such medical, serious dental, surgical and
hospital treatment as well as board and lodging until the seafarer is declared fit to work or
to be repatriated. However, if after repatriation, the seafarer still requires medical attention
arising from said injury or illness, he shall be so provided at cost to the employer until such
time he is declared fit or the degree of his disability has been established by the company-
designated physician.
3. In addition to the above obligation of the employer to provide medical attention, the
seafarer shall also receive sickness allowance from his employer in an
amount equivalent to his basic wage computed from the time he signed off until he
is declared fit to work or the degree of disability has been assessed by
the company-designated physician. The period within which the seafarer shall be
entitled to his sickness allowance shall not exceed 120 days. Payment of the sickness
allowance shall be made on a regular basis, but not less than once a month.
The seafarer shall be entitled to reimbursement of the cost of
medicines prescribed by the company-designated physician. In case treatment of the
seafarer is on an out-patient basis as determined by the company-designated
physician, the company shall approve the appropriate mode of transportation and
accommodation. The reasonable cost of actual traveling expenses and/or
accommodation shall be paid subject to liquidation and submission of official receipts
and/or proof of expenses.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon
his return except when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period is deemed as compliance. In the
course of the treatment, the seafarer shall also report regularly to the company-designated
physician specifically on the dates as prescribed by the company-designated physician
and agreed to by the seafarer. Failure of the seafarer to comply with the mandatory
reporting requirement shall result in his forfeiture of the right to claim the above
benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third
doctor may be agreed jointly between the employer and the seafarer. The third
doctor's decision shall be final and binding on both parties.
4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as
work-related.
5. In case a seafarer is disembarked from the ship for medical reasons, the employer shall
bear the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation;
or (2) fit to work but the employer is unable to find employment for the seafarer on board his
former ship or another ship of the employer.
6. In case of permanent total or partial disability of the seafarer caused by either injury
or illness the seafarer shall be compensated in accordance with the schedule of benefits
enumerated in Section 32 of his Contract. Computation of his benefits arising from an illness or
disease shall be governed by the rates and the rules of compensation applicable at the time
the illness or disease was contracted.
 The disability shall be based solely on the disability gradings provided under Section
32 of this Contract, and shall not be measured or determined by the number of days a
seafarer is under treatment or the number of days in which sickness allowance is paid.
7. It is understood and agreed that, the benefits mentioned above shall be
separate and distinct from, and will be in addition to whatever benefits which the
seafarer is entitled to under Philippine laws such as from the Social Security
System, Overseas Workers Welfare Administration, Employees' Compensation
Commission, Philippine Health Insurance Corporation and Home Development
Mutual Fund (Pag-IBIG Fund) .
e. Requisites for compensability of injury or illness.
Based on the above provision, an injury or illness is compensable when, first, it is work-
related and, second, the injury or illness existedduring the term of
the seafarer‟ s employment contract.
f. Requisites for occupational diseases.
An occupational disease and the resulting disability to be compensable, the following need to
be satisfied: (1) the seafarer's work must involve the risks described; (2)
the disease was contracted as a result of the seafarer's exposure to the described risks; (3)
the disease was contracted within a period of exposure and under such other factors necessary to
contract it; and (4) there was no notorious negligence on the part of the seafarer.260
The unqualified phrase “during the term” of employment covers all injury or illness
occurring during the lifetime of the contract. The injury or illness need not be shown to be work-
related. The important factor to consider is that there must be a showing that the injury or illness and
the ensuing disability occurred during the effectivity of the employment contract.261
g. Some principles on disability claims.
The POEA-SEC is the law between the parties.262
Injury is not the one compensated but the incapacity to work resulting in the impairment
of one‟ s earning capacity.” 263 Disability should be understood not more on its medical
significance, but on the loss of earning capacity.264
Disability arising from pre-existing illness is not compensable.265
Self-inflicted injury is not compensable.266
Strict rules of evidence are not applicable to compensation and disability claims cases of
OFWs.267
Misrepresentation on disability claims on the part of the claimant would defeat the claim
for total permanent disability.268
When the benefit under the law of registry of the vessel is higher than Philippine law, it
is correct to resolve the award based on the law of registry of the vessel providing greater
benefit.269
Failure to submit for post-employment medical examination by company-designated
physician within three (3) working days from repatriation which is a condition sine qua
non, bars the filing of a claim for disability benefits.270
The company-designated physician should make a definite assessment of the seafarer‟ s
fitness to work or permanent disability within the period of 120 or 240 days. If the
company-designated physician fails to arrive at a definite assessment of the seafarer's
fitness to work or permanent disability within the period of 120 or 240 days, the latter
shall be deemed totally and permanently disabled. On the other hand, an employee's
disability becomes permanent and total even before the lapse of the statutory 240-day
treatment period, when it becomes evident that the employee's disability continues and he
is unable to engage in gainful employment during such period because, for instance, he
underwent surgery and it evidently appears that he could not recover therefrom within the
statutory period.271
Accreditation with the POEA of the company-designated physician is not necessary.272
Findings of company-designated physician are not conclusive.273
OFW has the right to present controverting evidence.274
 OFW has the right to seek a second opinion from physicians other than company-
designated physician.275
The procedure in jointly engaging a third doctor whose decision is final and binding on
both parties should be complied with.276
In case of conflict of opinions, that which is favorable to the OFW should be adopted.277
When opinion from an independent third physician is not secured by the parties, the
NLRC has authority to evaluate the credibility of the findings of their respective doctors
on the basis of their inherent merits.278
Moral and exemplary damages may be awarded in disability claims cases filed by OFWs
for their physical suffering and mental anguish.279
Attorney‟ s fees may be granted if OFW is compelled to litigate or to incur expenses to
protect his interest or in any other case where the court deems it just and equitable to
grant.280
3. ON DEATH BENEFITS.
a. Basis of the computation for death benefits of OFWs.
The latest POEA-Standard Employment Contract (POEA-SEC) issued in 2010281 prescribes
the following compensation and benefits for death:
B. COMPENSATION AND BENEFITS FOR DEATH
1. In case of work-related death of the seafarer, during the term of his contract, the
employer shall pay his beneficiaries the Philippine currency equivalent to the amount of
Fifty Thousand US dollars (US$50,OOO) and an additional amount of Seven Thousand
US dollars (US$7,000) to each child under the age of twenty-one (21) but not exceeding four
(4) children, at the exchange rate prevailing during the time of payment.
2. Where death is caused by warlike activity while sailing within a declared war zone or war risk
area, the compensation payable shall be doubled. The employer shall undertake appropriate war
zone insurance coverage for this purpose.
3. It is understood and agreed that the benefits mentioned above shall be separate and
distinct from, and will be in addition to whatever benefits which the seafarer is
entitled to under Philippine laws from the Social Security System, Overseas
Workers Welfare Administration, Employee's Compensation Commission,
Philippine Health Insurance Corporation and Home Development Mutual Fund
(Pag-IBIG Fund) .
4. The other liabilities of the employer when the seafarer dies as a result of work-related injury
or illness during the term of employment are as follows:
a. The employer shall pay the deceased's beneficiary all outstanding obligations due the
seafarer under this Contract.
b. The employer shall transport the remains and personal effects of the seafarer to
the Philippines at employer's expense except if the death occurred in a port
where local government laws or regulations do not permit the transport of such
remains. In case death occurs at sea, the disposition of the remains shall be handled or
dealt with in accordance with the master's best judgment. In all cases, the
employer/master shall communicate with the manning agency to advise for disposition of
seafarer's remains.
c. The employer shall pay the beneficiaries of the seafarer the Philippine currency
equivalent to the amount of One Thousand US dollars (US$1,000) for burial
expenses at the exchange rate prevailing during the time of payment.
b. Requisites for entitlement.
Clearly, to be entitled for death compensation benefits from the employer, the death of the
seafarer (1) must be work-related; and (2) must happen during the term of the employment
contract. Under the Amended POEA Contract, work-relation is now an important requirement. The
qualification that death must be work-related has made it necessary to show a causal connection
between a seafarer‟ s work and his death to be compensable.282 Therefore, if the seafarer dies after the
termination of his contract of employment, his beneficiaries are not entitled to the death benefits.283
But even if the seafarer was merely on “shore leave” when he died, his death is not
compensable.
 In the 2013 case of Sy v. Philippine Transmarine Carriers, Inc. ,284 petitioner‟ s husband,
Alfonso N. Sy, was hired as an Able Seaman (AB) on board M/V Chekiang on June 23, 2005 and was found
dead on October 1, 2005, with drowning as the cause of death while he was on shore leavewhile the vessel
was at the Port of Jakarta, Indonesia. In denying petitioner‟ s claim for death benefits, the High Court ruled:
“Notably, at the time of the accident, AB Sy was on shore leave and there was no
showing that he was doing an act in relation to his duty as a seaman or engaged in the
performance of any act incidental thereto. It was not also established that, at the time of
the accident, he was doing work which was ordered by his superior ship officers to be
done for the advancement of his employer's interest. On the contrary, it was established
that he was on shore leave when he drowned and because of the 20% alcohol found in
his urine upon autopsy of his body, it can be safely presumed that he just came from a
personal social function which was not related at all to his job as a seaman.
Consequently, his death could not be considered work-related to be compensable.”
c. Some principles on death benefits.
 Death, to be compensable, should be shown to have been caused by an illness
acquired during the term of his employment. “Indeed, the death of a seaman several
months after his repatriation for illness does not necessarily mean that: (a) the seaman
died of the same illness; (b) his working conditions increased the risk of contracting the
illness which caused his death; and (c) the death is compensable, unless there is some
reasonable basis to support otherwise.” 285
 If death is caused by the OFW himself, it is not compensable.286
 Even in case of death of a seafarer, the grant of benefits in favor of the heirs of the
deceased is not automatic. Without a post-medical examination or its equivalent to show
that the disease for which the seaman died was contracted during his employment or that
his working conditions increased the risk of contracting the ailment, the employer cannot
be made liable for death compensation.287In fact, the death of a seaman even during
the term of employment does not automatically give rise to compensation.288
2.
DIRECT HIRING
1. DEFINITION.
“Direct Hiring” refers to the process of directly hiring workers by employers for overseas
employment as authorized by the DOLE Secretary and processed by the POEA, including:
1. Those hired by international organizations;
2. Those hired by members of the diplomatic corps;
3. Name hires or workers who are able to secure overseas employment opportunity with an
employer without the assistance or participation of any agency.289
2. OPTIONAL INSURANCE COVERAGE.
For migrant workers classified as rehires, name hires or direct hires, they may opt to be covered
by this insurance coverage by requesting their foreign employers to pay for the cost of the insurance
coverage or they may pay for the premium themselves. To protect the rights of these workers, the
DOLE and POEA shall provide them adequate legal assistance, including conciliation and mediation
services, whether at home or abroad.290

B.
REGULATION AND ENFORCEMENT

1.
SUSPENSION OR CANCELLATION
OF LICENSE OR AUTHORITY
(Article 35, Labor Code)
1. ARTICLE 35 OF THE LABOR CODE.
This provision states:
 “Article 35. Suspension and/or Cancellation of License or Authority. - The Minister of
Labor shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by the
291 292
Ministry of Labor, the Overseas Employment Development Board, or for violation of
the provisions of this and other applicable laws, General Orders and Letters of
Instructions.”
2. RECRUITMENT VIOLATIONS AND RELATED CASES.
a. Jurisdiction of the POEA over recruitment violations and related cases. The
POEA has original and exclusive jurisdiction to hear and decide:
(a) All cases which are administrative in character, involving or arising out of violation of
rules and regulations relating to licensing and registration of recruitment and employment
agencies or entities, including refund of fees collected from workers and violation of the
conditions for the issuance of license to recruit workers.293
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.294
It must be emphasized that even without a written complaint from an aggrieved party, the
POEA can initiate proceedings against an erring private placement agency and, if the result of its
investigation so warrants, impose the corresponding administrative sanction thereon.295
b. Cases not falling within the jurisdiction of the POEA.
1) Money claims cases of OFWs. - The POEA had ceased to have any jurisdiction over
claims arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and other
forms of damages. The jurisdiction over these claims was transferred to the Labor Arbiters of the
NLRC by virtue of Section 10 of R.A. No. 8042, as amended.296
2) Quasi-delict or tort cases. - The POEA has no jurisdiction over tort cases where the
complaint alleges claims under the Civil Code and not under the Labor Code as when the matters
demanded are not labor benefits such as wages, overtime or separation pay.297
Even Labor Arbiters and the NLRC have no jurisdiction over quasi-delict or tort cases per
Article 2176 of the Civil Code that have no reasonable causal connection to any of the claims provided
in the Labor Code, other labor statutes, or collective bargaining agreements.298 These cases are
cognizable by the regular courts.
3) Enforcement of foreign judgment. - The POEA, being an administrative body performing
adjudicatory or quasi-judicial functions, has no jurisdiction to hear and decide a claim for enforcement
of a foreign judgment. Such claim must be brought before the regular courts.299
4) Local employment. - The POEA has no jurisdiction where the cause of action rests upon
the local employment contract and not the overseas contract. The jurisdiction thereover lies with the
Labor Arbiters of the NLRC.300
c. Nature of POEA proceeding, administrative not criminal.
The administrative determination of facts and the consequent imposition of the suspension or
revocation of authority or license does notmake the proceedings criminal. It
remains administrative in character.301
d. Closure order.
The DOLE Secretary or the POEA Administrator or the DOLE Regional Director of the
appropriate regional office outside the National Capital Region, or their duly authorized
representatives, may conduct an ex-parte preliminary examination to determine whether the activities
of a non-licensee constitute a danger to national security and public order or will lead to further
exploitation of job seekers. If upon such preliminary examination or surveillance, the DOLE Secretary,
the POEA Administrator or DOLE Regional Director is satisfied that such danger or exploitation
exists, a written order may be issued for the closure of the establishment being used for illegal
recruitment activity.302
e. Power to issue arrest and search and seizure orders, unconstitutional.
 It was declared in Salazar v. Achacoso,303 that the exercise by the DOLE Secretary of his
twin powers to issue arrest and search and seizure orders provided under Article 38[c] of the Labor
Code is unconstitutional. This declaration of nullity and unconstitutionality, however, should not affect
the exercise of the other distinct power to close violator-companies, establishments or entities.304
3. GROUNDS FOR THE IMPOSITION OF ADMINISTRATIVE SANCTIONS AGAINST
RECRUITERS AND THEIR FOREIGN PRINCIPALS/EMPLOYERS.
a. For land-based overseas workers under the 2002 POEA Rules.
1. Charging, imposing or accepting directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose whatsoever before employment is obtained for
an applicant worker;
2. Charging or accepting directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the DOLE Secretary, or making a worker pay any
amount greater than that actually received by him as a loan or advance;
3. Charging or collecting placement fee for deployment to countries where the prevailing
system, either by law, policy or practice, does not allow the charging or collection of
placement and recruitment fees.
4. Collecting any fee from a worker without issuing the appropriate receipt clearly showing the
amount paid and the purpose for which payment was made;
5. Engaging in act/s of misrepresentation in connection with recruitment and placement of
workers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment;
6. Inducing or attempting to induce an already employed worker to transfer from or leave his
employment for another unless the transfer is designed to liberate a worker from oppressive
terms and conditions of employment;
7. Influencing or attempting to influence any person or entity not to employ any worker who has
not applied for employment through his agency;
8. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives;
9. Substituting or altering to the prejudice of the worker, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department;
10. Failure to submit reports related to overseas recruitment and employment within the
specified time, as may be required by the Secretary or the Administration;
11. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency;
12. Withholding or denying travel or other pertinent documents from workers for considerations
other than those authorized under existing laws and regulations;
13. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration;
14. Appointing or designating agents, representatives or employees without prior approval from
the Administration;
15. Falsifying or altering travel documents of applicant worker in relation to overseas
recruitment activities;
16. Deploying workers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it;
17. Deploying workers to principals not accredited/registered by the Administration;
18. Failure to deploy a worker within the prescribed period without valid reason;
19. Disregard of orders, notices and other legal processes issued by the Administration;
20. Coercing workers to accept prejudicial arrangements in exchange for certain benefits that
rightfully belong to the workers;
21. Withholding of workers salaries‟ or remittances without justifiable reasons or shortchanging
of remittances;
22. Deploying underage workers;
23. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents;
24. Engaging in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines,
25. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment;
26. Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, where deployment does not take place
without the worker‟s fault;
27. Failure to comply with the undertaking to deploy the required number of workers within the
period provided in the Rules;
28. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
workers;
29. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license;
30. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency; and
31. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuances on recruitment and placement of workers for
305
overseas employment and the protection of their welfare.
b. For seafarers under the 2003 POEA Rules.
1. Charging, imposing or accepting directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose from an applicant seafarer;
2. Engaging in acts of misrepresentation, such as furnishing or publishing any false or
deceptive notices or information in connection with the recruitment and employment of
seafarers;
3. Inducing or attempting to induce an already employed seafarer to transfer from or leave his
employment for another unless the transfer is designed to liberate the seafarer from
oppressive terms and conditions or employment;
4. Influencing or attempting to influence any person or entity not to employ any seafarer who
has not applied for employment through his agency;
5. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives;
6. Substituting or altering to the prejudice of the seafarer employment contracts and other
documents approved and verified by the Department from the time of actual signing thereof
by the parties up to and including the period of expiration of the same without the
Department‟s approval;
7. Failure to submit reports related to overseas recruitment and employment within the
specified time, as may be required by the Secretary or the Administration;
8. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency;
9. Withholding or denying travel or other pertinent documents from seafarers for reasons other
than those authorized under existing laws and its implementing rules and regulations;
10. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration;
11. Appointing or designating agents, representatives or employees without prior approval from
the Administration;
12. Falsifying or altering travel documents of applicant seafarer;
13. Deploying seafarers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it;
14. Deploying seafarers to principals not accredited by the Administration or to vessels not
enrolled with the deploying agency;
15. Failure to deploy a seafarer within the prescribed period without valid reason;
16. Disregard of lawful orders, notices and other processes issued by the Administration;
17. Coercing a seafarer to accept prejudicial arrangements in exchange for certain benefits
that rightfully belong to the seafarer;
18. Withholding of seafarers‟ salaries or remittances without justifiable reasons or
shortchanging of remittances;
19. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false testimonies or information or falsified documents;
20. Engaging in the recruitment or deployment of seafarers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines;
21. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency;
 22. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment;
23. Failure to comply with its undertaking to provide Pre-Departure Orientation Seminar to its
seafarers;
24. Failure to comply with the undertaking to deploy the required number of seafarers within
the period, provided in the Rules;
25. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license;
26. Failure to reimburse expenses incurred by the seafarer in connection with his
documentation and processing for purposes of deployment, where deployment does not
take place without the seafarer‟s fault; and
27. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuance on recruitment and deployment of seafarers for
306
overseas employment and the protection of their welfare.
4. CLASSIFICATION OF OFFENSES OF RECRUITERS AND THEIR FOREIGN
PRINCIPALS/EMPLOYERS AND SCHEDULE OF PENALTIES IN CONNECTION WITH
THE RECRUITMENT AND PLACEMENT OF LAND-BASED WORKERS AND
SEAFARERS.
a. Classification of offenses for both land-based overseas workers and seafarers.
Under the POEA Rules,307 administrative offenses are classified into (1) serious,(2) less
serious and (3) light, depending on their gravity. The POEA imposes the appropriate administrative
penalties for every recruitment violation.308
b. Serious offenses in the recruitment of land-based overseas workers with
corresponding penalty.
1. Deploying underage workers:
1st Offense —Cancellation of License
2. Engaging in acts of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents:
1st Offense — Cancellation of License
3. Engaging in the recruitment or placement of workers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines:
1st Offense — Cancellation of License
4. Transfer or change of ownership of a single proprietorship licensed to the engage in
overseas employment:
1st Offense — Cancellation of License
5. Charging or collecting placement fee for deployment to countries where the prevailing
system, either by law, policy or practice, does not allow the charging or collection of
placement and recruitment fees:
1st Offense — Cancellation of License plus refund of the placement fee charged or collected from
the worker
The penalty shall carry the accessory penalty of refund of the fee collected from the worker.
6. Charging or accepting directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary, or making a worker pay any amount
greater than that actually received by him as a loan or advance:
1st Offense — Cancellation of License plus refund of the placement fee charged or collected from
the worker
The penalty shall carry the accessory penalty of refund of the excessive fee charged or
collected from the worker.309
c. Serious offenses in the recruitment of seafarers.
1. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents:
1st Offense — Cancellation of License
2. Engaging in the recruitment or placement of seafarers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines:
1st Offense — Cancellation of License
3. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment:
1st Offense — Cancellation of License
4. Charging or accepting directly or indirectly any amount of money, goods or services, or any
fee or bond for any purpose from the seafarers:
1st Offense — Cancellation of License
 The penalty shall carry the accessory penalty of refund of the fee charged or collected from
the worker.310
d. Less serious offenses in the recruitment of land-based overseas workers.
1. Charging, imposing or accepting, directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose whatsoever before employment is obtained for
an applicant worker:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of refund of the fee charged or collected from the
worker, in case of non-deployment.
2. Collecting any fee from a worker without issuing the appropriate receipt clearly showing the
amount paid and the purpose for which payment was made:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
3. Engaging in acts of misrepresentation in connection with recruitment and placement of
workers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
4. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
5. Substituting or altering to the prejudice of the worker, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
6. Withholding or denying travel or other pertinent documents from workers for reasons other
than those authorized under existing laws and regulations:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
7. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
8. Appointing or designating agents, representatives or employees without prior approval from
the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
9. Falsifying or altering travel documents of applicant worker in relation to recruitment activities:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
10. Deploying workers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
11. Deploying workers to principals not accredited/registered by the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
3rd Offense — Cancellation of License
12. Withholding of workers‟ salaries or remittances without justifiable reasons or shortchanging
of remittances:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
 The penalty shall carry the accessory penalty of immediate release of the salaries or
remittances being claimed.
13. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense —- Cancellation of License
14. Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, where deployment does not take place without
the worker‟s fault:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of immediate refund of expenses incurred by the
worker.
15. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
workers:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
16. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
3rd Offense — Cancellation of License311
e. Less serious offenses in the recruitment of seafarers.
1. Engaging in acts of misrepresentation in connection with recruitment and placement of
seafarers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
2. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
3. Substituting or altering to the prejudice of the seafarer, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
4. Withholding or denying travel or other pertinent documents from seafarers for reasons other
than those authorized under existing laws and regulations:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty for immediate return of the documents
withheld.
5. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
6. Appointing or designating agents, representatives or employees without prior approval from
the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
7. Falsifying or altering travel documents of an applicant seafarer in relation to recruitment
activities:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
8. Deploying seafarers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
9. Deploying seafarers to principals not accredited/registered by the Administration or to
vessels not enrolled to the deploying agency:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
10. Withholding of seafarers‟ salaries or remittances without justifiable reasons or
shortchanging of remittances:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of release of the salaries or remittances being
claimed.
11. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
12. Failure to reimburse expenses incurred by the seafarers in connection with his
documentation and processing for purposes of deployment, where deployment does not
take place without the seafarer‟s fault:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of immediate refund of expenses incurred by the
worker.
13. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
seafarers:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
14. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
3rd Offense — Cancellation of License312
f. Light offenses in the recruitment of land-based overseas workers and seafarers.
1. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
2. Inducing or attempting to induce an already employed worker to transfer from or leave his
employment for another unless the transfer is designed to liberate a worker from oppressive
terms and conditions of employment:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
3. Influencing or attempting to influence any person or entity not to employ any worker who has
not applied for employment through his agency:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
4. Failure to deploy a worker within the prescribed period without valid reason:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months)
 4th Offense — Cancellation of License
5. Coercing workers to accept prejudicial arrangements in exchange for certain benefits that
rightfully belong to the workers:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
6. Disregard of orders, notices and other legal processes issued by the Administration:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
7. Failure to submit reports related to overseas recruitment and employment within the
specified time as may be required by the Secretary or the Administration:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
8. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuances on recruitment and placement of workers for
overseas employment and the protection of their welfare:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License

g. Money claims in addition to administrative penalties.

Money claims arising from recruitment violations may be awarded in addition to the
administrative penalties imposed.313
h. Imposition of fines.
In addition or in lieu of the penalty of suspension of license, the Administration (POEA) may
impose the penalty of fine which shall be computed at P10,000.00 for every month of suspension.314
i. Mitigating, aggravating or alternative circumstances.
In the determination of the penalties to be imposed, the following mitigating, aggravating and
alternative circumstances attendant to the commission of the offense shall be considered:
a. First Offender;
b. Admission of guilt and voluntary restitution, where applicable;
c. Good faith;
d. Exemplary Performance;
e. Recidivism;
f. Prejudice to the worker;
g. Gross negligence;
h. Other analogous circumstances.315
j. Cancellation of license, proper penalty for cases involving five (5) or more
complainants.
A respondent recruitment agency found guilty of committing an offense, regardless of the
number or nature of charges, against five (5) or more complainants in a single case shall be imposed
the penalty of cancellation of license.316
5. DISCIPLINARY ACTION CASES AGAINST FOREIGN PRINCIPALS/EMPLOYERS OF
LAND-BASED WORKERS AND SEAFARERS.
a. Grounds for disciplinary action against foreign principals or employers.
The following are the grounds for disciplinary action against foreign principals or
employers:317
a. Default on its contractual obligations to the migrant worker (or seafarer) and/or to its
Philippine agent;
b. Gross violation of laws, rules and regulations on overseas employment;
c. Gross negligence leading to serious injury or illness or death of the worker (or seafarer) ;
 d. Grave misconduct;
e. Conviction of an offense involving moral turpitude;
318
f. Any other case analogous to the foregoing.
b. Temporary disqualification of foreign principal or employer.
A foreign employer or principal against whom a complaint for disciplinary action has been
filed shall be temporarily disqualified from participating in the overseas employment program for land-
based overseas workers (or maritime employment program in case of seafarers) until the respondent
submits to the jurisdiction of the Administration (POEA) .319
c. Preventive suspension.
A principal or employer may be suspended from participating in the overseas employment
program pending investigation of the disciplinary action case when the evidence of guilt is strong and there
is reasonable ground to believe that the continued deployment to the principal or employer will result to
further violation or exploitation of migrant workers.
The Overseas Employment Adjudicator (OEA) shall, within sixty (60) calendar days from the
filing of the case, submit his findings and recommendations in the form of a draft order.320
d. Disqualification of foreign principals or employers.
Foreign principals or employers against whom the penalty of suspension or disqualification
had been imposed through an order, decision or resolution shall be disqualified from participating in
the overseas employment program for land-based overseas workers (or maritime employment program
in case of seafarers) unless cleared by the Administration (POEA) or the penalty imposed is lifted.321
2.
REGULATORY AND VISITORIAL POWERS
OF THE DOLE SECRETARY

1. TWO (2) SEPARATE PROVISIONS IN THE LABOR CODE.

As far as recruitment and placement of workers for local and overseas employment are
concerned, the Labor Code contains two (2) separate provisions on the regulatory and visitorial powers of the
DOLE Secretary, namely:
1. Article 36 - Regulatory Power; and
2. Article 37 - Visitorial Power.
2. REGULATORY POWER.
a. Article 36, Labor Code.
The regulatory power is embodied in Article 36, to wit:
“Article 36. Regulatory Power. - The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement activities of all agencies within the
coverage of this Title and is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions of this Title.”
b. Nature of regulatory power.
The power to regulate and restrict the recruitment and placement activities of all agencies
conferred by Article 36 to the DOLE Secretary is a valid grant of police power.322
Being regulatory, the DOLE Secretary may validly issue rules and regulations restricting or
otherwise regulating the recruitment and placement activities of persons and entities engaged in the
recruitment and placement of workers locally or overseas.
c. Exercise of the regulatory power.
Pursuant to Article 36 and in accordance with other pertinent and related provisions of the
Labor Code, the DOLE Secretary has issued several implementing rules, circulars, guidelines and
regulations.323
3. VISITORIAL POWER.
a. Article 37, Labor Code.
The visitorial power is found in Article 37, viz:
 “Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises, books of accounts and records
of any person or entity covered by this Title, require it to submit reports regularly on
prescribed forms, and act on violation of any provisions of this Title.”
b. Distinctions of the visitorial powers of the DOLE Secretary under Articles 274 and 128
of the Labor Code.
The visitorial power of the DOLE Secretary or his duly authorized representatives described
in Article 37 of the Labor Code should be distinguished from the other visitorial powers granted to him
by other provisions of the Labor Code such as the ones provided for under Article 128 and Article 274
thereof.
Here, the visitorial power pertains to the inspection of the premises, books of accounts and
records of persons and entities engaged in therecruitment and placement of workers
for local or overseas employment. It also includes the power to require the submission of reports
regularly on certain prescribed forms and to act on any violation of Title I, Book I of the Labor
Code.324
The visitorial and enforcement power of the DOLE Secretary or the DOLE Regional
Directors, his duly authorized representatives, treated inArticle 128 pertains to the inspection of
premises, books of accounts and records of local employers to determine violations of the Labor Code
and any labor laws, wage orders or rules and regulations issued pursuant thereto.325
Article 274 dwells on the visitorial power of the DOLE Secretary to inquire into the financial
activities of legitimate labor organizations.
c. Effect of obstruction of exercise of visitorial power.
The act of any person, whether a non-licensee, non-holder, licensee or holder of authority, in
obstructing or attempting to obstruct inspection by the DOLE Secretary or by his duly authorized
representative under Article 37 of the Labor Code is one of the prohibited practices and unlawful acts
which constitutes “illegal recruitment.” 326
3.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
1. REMITTANCE OF FOREIGN EXCHANGE EARNINGS IS MANDATORY.
It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with
rules and regulations prescribed by the DOLE Secretary.327 It should be made through the Philippine
banking system.328
The obligation to remit is required to be stipulated in the following documents:
(1) Contract of employment and/or service between a foreign-based employer and a worker;
(2) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his
earnings to his beneficiaries;
(3) Application for a license or authority to recruit workers;
(4) Recruitment agreement and/or service contract between a licensed agency or authority
holder and its foreign employer or principal; and
(5) Application for accreditation of a principal or project.329
2. REASON WHY OBLIGATION IS MANDATORY.
Remittance to the Philippines of foreign exchange earnings of Filipino workers abroad is
necessary to protect the welfare of their families, dependents and beneficiaries and to ensure that their
foreign exchange earnings are remitted through authorized financial institutions of the Philippine
government in line with the country‟ s economic development program. Non-compliance with the laws
and regulations on remittance of foreign exchange earnings and recourse to the use of unauthorized and
unofficial financing institutions had led to the detriment of the country‟ s balance of payments and
economic development program. Consequently, it is imperative that the mandatory remittance
requirement be fully complied with by all concerned through the institution of appropriate remittance
facilities and the imposition of effective sanctions.330
3. COVERAGE.
This mandatory requirement applies to every OFW recruited and placed in overseas
employment. It also applies to licensed agencies and authority holders.331
4. AMOUNT OF FOREIGN EXCHANGE REMITTANCES.
The percentage of foreign remittance shall be as follows:
1. Seamen and mariners: Eighty percent (80%) of the basic salary;
2. Workers of Filipino contractors and construction companies: Seventy percent (70%) of the
basic salary;
3. Doctors, engineers, teachers, nurses and other professional workers whose employment
contracts provide for free board and lodging facilities: Seventy percent (70%) of the basic
salary;
4. All other professionals whose employment contracts do not provide free board and lodging
facilities: Fifty percent (50%) of the basic salary;
5. Domestic and other service workers: Fifty percent (50%) of the basic salary;
6. All other workers not falling under the afore-mentioned categories: Fifty percent (50%) of
the basic salary.332
7. Performing artists overseas are required to remit at least fifty percent (50%) of their
monthly salary to the Philippines. 333
5. FORM OF REMITTANCE.
Remittance of foreign exchange may be done individually by a worker or collectively through
an employer under a payroll deduction scheme, to be approved by the DOLE.334
6. PROCEDURE OF REMITTANCE.
(a) The OFW, prior to departure, is required to open a deposit account for his mandatory
remittance in favor of his beneficiary in any Philippine bank. A foreign currency account may also be
opened by the worker to be funded by savings in excess of the mandatory remittance. The applicant should
inform the POEA of his deposit account number.
(b) In the case of seamen/seafarer, construction workers and other organized work crews
involving at least twenty five (25) workers, the foreign currency/peso account should be opened by the
employee with any Philippine bank upon the signing of the employment contract. The account shall be
accompanied by a covering letter of nomination of beneficiaries and the date of payment of the
allotment to the beneficiaries as may be stipulated by the employee and the licensed agency, manning
agency or construction contractor.
(c) At the end of every period as may be stipulated in the notice as payment, the licensed
agency, construction contractor or manning agent shall prepare a payroll sheet indicating the names of the
workers covered by the scheme, their beneficiaries, their individual bank account numbers, the amount
of foreign currency remitted and the peso equivalent thereof. This payroll sheet, together with the peso check
representing the remittance, shall be forwarded to the bank concerned with instructions to credit the account
of the worker or beneficiaries. A copy of the payroll sheet shall be furnished the POEA on a monthly basis.
(d) No local agent or representative shall pay directly the beneficiaries of the worker. The
agent or representative shall submit to the POEA copies of the reports which the bank may require him
to submit and payroll sheets on or before the end of the succeeding month of the payroll period
together with the bank credit advice evidencing remittance of foreign exchange.335
7. FAILURE OR REFUSAL TO REMIT AND TRAFFICKING IN FOREIGN CURRENCY.
A licensed agency, authority holder, or manning agent or a worker who wilfully fails or
refuses to remit the assigned portion of his foreign exchange earnings or is found to have engaged or is
engaging in the illegal traffic or blackmarket of foreign exchange, shall be liable under the Labor Code
and existing Central Bank rules.336
8. RESPONSIBILITY OF EMPLOYER OR HIS REPRESENTATIVE.
 The employer or his representative shall undertake the proper implementation of the
law,337 by providing facilities to effect the remittance and monitoring of foreign exchange earnings.
Failure to do so shall be subject to appropriate sanctions specified in the Labor Code and regulations
issued by the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) .338
9. OBLIGATION TO REPORT.
Agencies shall submit periodic reports to the Bangko Sentral ng Pilipinas on their foreign
exchange earnings, copies of which shall be furnished the POEA.339
10. NON-COMPLIANCE WITH THE MANDATORY REMITTANCE REQUIREMENT;
EFFECT ON ISSUANCE, RENEWAL AND EXTENSION OF PASSPORT.
Under the law,340 it is declared that no passport shall be issued, renewed or extended by the
Department of Foreign Affairs (DFA) unless proof of applicant ‟ s substantial compliance with the
mandatory remittance requirement in the percentages provided under the law is submitted.341
Passports issued to Filipino contract workers shall have an initial period of validity of one (1)
year. The DFA may, however, adjust, as circumstances may require, the initial passport validity
period.342
The passport shall be renewable every year upon submission of usual requirements and
presentation of documentary proof of compliance to the remittance requirement.343
11. “SUBSTANTIAL COMPLIANCE,” EXPLAINED.
The Inter-Agency Committee344 created to implement the law, clarified345 the foregoing effect
of non-compliance with the mandatory remittance requirement on the issuance, renewal and extension
of passport. Said Committee declared that in accordance with the normal duration of contracts of
employment and taking into account the provisions of some issuances346 mandating the DFA to adjust,
as circumstances may require, the initial validity period, passports issued to OFWs shall be valid for two (2)
years, renewable for another two (2) years, subject to compliance with the mandatory remittance
requirement.
An OFW shall be deemed to have substantially complied with the mandatory requirement if, at the time
he applies for renewal of passport or renewal of his employment contract during the period cited above, he
can show proof that he has remitted and sold for pesos at least one-half (1/2) of the amount of foreign
exchange corresponding to the mandatory remittance required of him.
The requirement to remit on a monthly basis need not be strictly applied during the initial period of
implementation provided that the amount remitted and sold for pesos through authorized financing
institutions shall at least be equal to one-half of the amount corresponding to the mandatory percentage
requirement defined under the Executive Order.
For example, if the salary of a contract worker is US$200 a month or US$2,400 a year, such
worker is required to remit 50% thereof or US$1,200 annually under the law.347 Pursuant to the
substantial compliance formula, a contract worker needs only to show proof that he has at least remitted
and sold for pesos 50% of US$1,200 thereof or US$600.00 a year.
The “substantial compliance” rule as defined, applies to contract workers remitting on an
individual basis. It does not apply to OFWs already remitting or who will be remitting under the
payroll system, or on a monthly basis.348
12. NON-COMPLIANCE WITH THE MANDATORY REMITTANCE REQUIREMENT,
EFFECTS.
a. On accreditation of employer, issuance of license or authority and approval/renewal of
contracts of employment.
No accreditation shall be issued to an employer, and no license or authority shall be granted to
an agency or entity by the DOLE unless they submit proof that they have provided facilities to effect
the remittance of foreign exchange earnings of Filipino workers under their employ.349
No contracts of employment and/or service agreement shall be approved or renewed by the
DOLE unless proof of compliance with the mandatory remittance requirement is submitted.350
b. On the OFW.
 An OFW who fails to comply with the mandatory remittance requirement shall be suspended
or excluded from the list of eligible workers for overseas employment and in case of subsequent
violations, he shall be repatriated at his own expense or at the expense of his employer, as the case may
be.351
c. On foreign employers.
Foreign employers and/or their representatives who fail to comply with the law shall be
excluded from the overseas employment program.352
d. On private employment agencies.
In the case of local private employment agencies and other similar entities, their failur e to
comply with the mandatory remittance requirement shall be a ground for cancellation of their authority
to recruit workers for overseas employment without prejudice to their liabilities under existing laws
and regulations.353
13. CONFLICT IN MANDATORY REMITTANCE REQUIREMENT AND HOST
COUNTRY’S REGULATIONS ON THE MATTER.
Should there be a conflict in complying with the mandatory remittance requirement in view of
the host country‟ s regulations on the matter, the percentages of remittance shall be, within allowable
limits, set down by local laws.354
14. EFFECT IF BENEFICIARIES ARE LIVING WITH OFWs ABROAD.
An OFW whose immediate family members, dependents or beneficiaries are residing with
him abroad, is not compelled to comply with the mandatory remittance requirement except if the
dependents themselves are contract workers, subject to verification of his family status by the DFA
and/or DOLE. He should be encouraged, nevertheless, to remit a portion of his foreign earnings to the
Philippines.355
15. PUNITIVE PROVISIONS OF EXECUTIVE ORDER NO. 857, REPEALED.
Executive Order No. 1021 [On Encouraging the Inward Remittances of Contract Workers
Earnings Through Official Channels] issued on May 1, 1985 by President Ferdinand E. Marcos, repealed
the punitive provisions of Executive Order No. 857.
16. ROLE OF EMBASSY AS CHANNEL FOR REMITTANCE.
The role of the Embassy356 is only temporary, in the absence of banking facilities in the
jobsite and pending the establishment of appropriate arrangements by the Bangko Sentral ng Pilipinas.
In exercising this function, the Embassy shall abide by customary local laws and regulations of the host
country.357
17. REMITTANCES OF OFWs, NOT DEEMED PERSONAL DEDUCTIONS FOR INCOME
TAXATION PURPOSES.
The obligations of OFWs to remit portions of their foreign exchange earnings under the
law358 are separate and distinct from the personal deductions defined under gross income taxation
laws.359
4.
PROHIBITED ACTIVITIES

1. PROHIBITED ACTIVITIES.
Besides illegal recruitment, the law360 additionally provides that it shall also be unlawful for
any person or entity to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per
annum, which will be used for payment of legal and allowable placement fees and make the
migrant worker issue, either personally or through a guarantor or accommodation party,
post-dated checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to avail of a loan only from specifically designated institutions, entities or persons;
 (3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the
latter's employment contract has been prematurely terminated through no fault of his or her
own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo health examinations only from specifically designated medical clinics,
institutions, entities or persons, except in the case of a seafarer whose medical examination
cost is shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo training, seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or persons, except for recommendatory trainings
mandated by principals/shipowners where the latter shoulder the cost of such trainings;
(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity
including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas
Filipino worker or deduct from his or her salary the payment of the cost of insurance fees,
premium or other insurance related charges, as provided under the compulsory worker's
insurance coverage.

Chapter Two
RECRUITMENT AND PLACEMENT
TOPICS PER SYLLABUS
B. Regulation and enforcement
1. Suspension or cancellation of license or authority (Art. 35, Labor Code)
2. Regulatory and visitorial powers of the DOLE secretary
3. Remittance of foreign exchange earnings
4. Prohibited activities

B.
REGULATION AND ENFORCEMENT

1.
SUSPENSION OR CANCELLATION
OF LICENSE OR AUTHORITY
(Article 35, Labor Code)
1. ARTICLE 35 OF THE LABOR CODE.
This provision states:
“Article 35. Suspension and/or Cancellation of License or Authority. - The Minister of
Labor shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by the
1 2
Ministry of Labor, the Overseas Employment Development Board, or for violation of the
provisions of this and other applicable laws, General Orders and Letters of Instructions.”
2. RECRUITMENT VIOLATIONS AND RELATED CASES.
 a. Jurisdiction of the POEA over recruitment violations and related cases. The
POEA has original and exclusive jurisdiction to hear and decide:
(a) All cases which are administrative in character, involving or arising out of violation of
rules and regulations relating to licensing and registration of recruitment and employment
agencies or entities, including refund of fees collected from workers and violation of the
conditions for the issuance of license to recruit workers.3
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.4
It must be emphasized that even without a written complaint from an aggrieved party, the
POEA can initiate proceedings against an erring private placement agency and, if the result of its
investigation so warrants, impose the corresponding administrative sanction thereon.5
b. Cases not falling within the jurisdiction of the POEA.
1) Money claims cases of OFWs. - The POEA had ceased to have any jurisdiction over
claims arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and other
forms of damages. The jurisdiction over these claims was transferred to the Labor Arbiters of the
NLRC by virtue of Section 10 of R.A. No. 8042, as amended.6
2) Quasi-delict or tort cases. - The POEA has no jurisdiction over tort cases where the
complaint alleges claims under the Civil Code and not under the Labor Code as when the matters
demanded are not labor benefits such as wages, overtime or separation pay.7
Even Labor Arbiters and the NLRC have no jurisdiction over quasi-delict or tort cases per
Article 2176 of the Civil Code that have no reasonable causal connection to any of the claims provided
in the Labor Code, other labor statutes, or collective bargaining agreements.8 These cases are
cognizable by the regular courts.
3) Enforcement of foreign judgment. - The POEA, being an administrative body performing
adjudicatory or quasi-judicial functions, has no jurisdiction to hear and decide a claim for enforcement
of a foreign judgment. Such claim must be brought before the regular courts.9
4) Local employment. - The POEA has no jurisdiction where the cause of action rests upon
the local employment contract and not the overseas contract. The jurisdiction thereover lies with the
Labor Arbiters of the NLRC.10
c. Nature of POEA proceeding, administrative not criminal.
The administrative determination of facts and the consequent imposition of the suspension or
revocation of authority or license does notmake the proceedings criminal. It
remains administrative in character.11
d. Closure order.
The DOLE Secretary or the POEA Administrator or the DOLE Regional Director of the
appropriate regional office outside the National Capital Region, or their duly authorized
representatives, may conduct an ex-parte preliminary examination to determine whether the activities
of a non-licensee constitute a danger to national security and public order or will lead to further
exploitation of job seekers. If upon such preliminary examination or surveillance, the DOLE Secretary,
the POEA Administrator or DOLE Regional Director is satisfied that such danger or exploitation
exists, a written order may be issued for the closure of the establishment being used for illegal
recruitment activity.12
e. Power to issue arrest and search and seizure orders, unconstitutional.
It was declared in Salazar v. Achacoso,13 that the exercise by the DOLE Secretary of his twin
powers to issue arrest and search and seizure orders provided under Article 38[c] of the Labor Code is
unconstitutional. This declaration of nullity and unconstitutionality, however, should not affect the
exercise of the other distinct power to close violator-companies, establishments or entities.14
3. GROUNDS FOR THE IMPOSITION OF ADMINISTRATIVE SANCTIONS AGAINST
RECRUITERS AND THEIR FOREIGN PRINCIPALS/EMPLOYERS.
a. For land-based overseas workers under the 2002 POEA Rules.
1. Charging, imposing or accepting directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose whatsoever before employment is obtained for
an applicant worker;
2. Charging or accepting directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the DOLE Secretary, or making a worker pay any
amount greater than that actually received by him as a loan or advance;
3. Charging or collecting placement fee for deployment to countries where the prevailing
system, either by law, policy or practice, does not allow the charging or collection of
placement and recruitment fees.
4. Collecting any fee from a worker without issuing the appropriate receipt clearly showing the
amount paid and the purpose for which payment was made;
5. Engaging in act/s of misrepresentation in connection with recruitment and placement of
workers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment;
6. Inducing or attempting to induce an already employed worker to transfer from or leave his
employment for another unless the transfer is designed to liberate a worker from oppressive
terms and conditions of employment;
7. Influencing or attempting to influence any person or entity not to employ any worker who has
not applied for employment through his agency;
8. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives;
9. Substituting or altering to the prejudice of the worker, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department;
10. Failure to submit reports related to overseas recruitment and employment within the
specified time, as may be required by the Secretary or the Administration;
11. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency;
12. Withholding or denying travel or other pertinent documents from workers for considerations
other than those authorized under existing laws and regulations;
13. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration;
14. Appointing or designating agents, representatives or employees without prior approval from
the Administration;
15. Falsifying or altering travel documents of applicant worker in relation to overseas
recruitment activities;
16. Deploying workers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it;
17. Deploying workers to principals not accredited/registered by the Administration;
18. Failure to deploy a worker within the prescribed period without valid reason;
19. Disregard of orders, notices and other legal processes issued by the Administration;
20. Coercing workers to accept prejudicial arrangements in exchange for certain benefits that
rightfully belong to the workers;
21. Withholding of workers salaries‟ or remittances without justifiable reasons or shortchanging
of remittances;
22. Deploying underage workers;
23. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents;
24. Engaging in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines,
25. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment;
26. Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, where deployment does not take place
without the worker‟s fault;
27. Failure to comply with the undertaking to deploy the required number of workers within the
period provided in the Rules;
28. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
workers;
29. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license;
30. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency; and
31. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuances on recruitment and placement of workers for
15
overseas employment and the protection of their welfare.
b. For seafarers under the 2003 POEA Rules.
1. Charging, imposing or accepting directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose from an applicant seafarer;
2. Engaging in acts of misrepresentation, such as furnishing or publishing any false or
deceptive notices or information in connection with the recruitment and employment of
seafarers;
3. Inducing or attempting to induce an already employed seafarer to transfer from or leave his
employment for another unless the transfer is designed to liberate the seafarer from
oppressive terms and conditions or employment;
4. Influencing or attempting to influence any person or entity not to employ any seafarer who
has not applied for employment through his agency;
5. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives;
6. Substituting or altering to the prejudice of the seafarer employment contracts and other
documents approved and verified by the Department from the time of actual signing thereof
by the parties up to and including the period of expiration of the same without the
Department‟s approval;
7. Failure to submit reports related to overseas recruitment and employment within the
specified time, as may be required by the Secretary or the Administration;
8. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency;
9. Withholding or denying travel or other pertinent documents from seafarers for reasons other
than those authorized under existing laws and its implementing rules and regulations;
10. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration;
11. Appointing or designating agents, representatives or employees without prior approval from
the Administration;
12. Falsifying or altering travel documents of applicant seafarer;
13. Deploying seafarers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it;
14. Deploying seafarers to principals not accredited by the Administration or to vessels not
enrolled with the deploying agency;
15. Failure to deploy a seafarer within the prescribed period without valid reason;
16. Disregard of lawful orders, notices and other processes issued by the Administration;
17. Coercing a seafarer to accept prejudicial arrangements in exchange for certain benefits
that rightfully belong to the seafarer;
18. Withholding of seafarers‟ salaries or remittances without justifiable reasons or
shortchanging of remittances;
19. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false testimonies or information or falsified documents;
20. Engaging in the recruitment or deployment of seafarers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines;
21. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency;
22. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment;
23. Failure to comply with its undertaking to provide Pre-Departure Orientation Seminar to its
seafarers;
24. Failure to comply with the undertaking to deploy the required number of seafarers within
the period, provided in the Rules;
25. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license;
 26. Failure to reimburse expenses incurred by the seafarer in connection with his
documentation and processing for purposes of deployment, where deployment does not
take place without the seafarer‟s fault; and
27. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuance on recruitment and deployment of seafarers for
16
overseas employment and the protection of their welfare.
4. CLASSIFICATION OF OFFENSES OF RECRUITERS AND THEIR FOREIGN
PRINCIPALS/EMPLOYERS AND SCHEDULE OF PENALTIES IN CONNECTION WITH
THE RECRUITMENT AND PLACEMENT OF LAND-BASED WORKERS AND
SEAFARERS.
a. Classification of offenses for both land-based overseas workers and seafarers.
Under the POEA Rules,17 administrative offenses are classified into (1) serious,(2) less
serious and (3) light, depending on their gravity. The POEA imposes the appropriate administrative
penalties for every recruitment violation.18
b. Serious offenses in the recruitment of land-based overseas workers with
corresponding penalty.
1. Deploying underage workers:
1st Offense —Cancellation of License
2. Engaging in acts of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents:
1st Offense — Cancellation of License
3. Engaging in the recruitment or placement of workers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines:
1st Offense — Cancellation of License
4. Transfer or change of ownership of a single proprietorship licensed to the engage in
overseas employment:
1st Offense — Cancellation of License
5. Charging or collecting placement fee for deployment to countries where the prevailing
system, either by law, policy or practice, does not allow the charging or collection of
placement and recruitment fees:
1st Offense — Cancellation of License plus refund of the placement fee charged or collected from
the worker
The penalty shall carry the accessory penalty of refund of the fee collected from the worker.
6. Charging or accepting directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary, or making a worker pay any amount
greater than that actually received by him as a loan or advance:
1st Offense — Cancellation of License plus refund of the placement fee charged or collected from
the worker
The penalty shall carry the accessory penalty of refund of the excessive fee charged or
collected from the worker.19

c. Serious offenses in the recruitment of seafarers.

1. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal
thereof, such as giving false information or documents:
1st Offense — Cancellation of License
2. Engaging in the recruitment or placement of seafarers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines:
1st Offense — Cancellation of License
3. Transfer or change of ownership of a single proprietorship licensed to engage in overseas
employment:
1st Offense — Cancellation of License
4. Charging or accepting directly or indirectly any amount of money, goods or services, or any
fee or bond for any purpose from the seafarers:
1st Offense — Cancellation of License
The penalty shall carry the accessory penalty of refund of the fee charged or collected from
the worker.20

d. Less serious offenses in the recruitment of land-based overseas workers.

1. Charging, imposing or accepting, directly or indirectly, any amount of money goods or
services, or any fee or bond for any purpose whatsoever before employment is obtained for
an applicant worker:
1st Offense — Suspension of License (Two Months to Six Months)
 2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of refund of the fee charged or collected from the
worker, in case of non-deployment.
2. Collecting any fee from a worker without issuing the appropriate receipt clearly showing the
amount paid and the purpose for which payment was made:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
3. Engaging in acts of misrepresentation in connection with recruitment and placement of
workers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
4. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
5. Substituting or altering to the prejudice of the worker, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
6. Withholding or denying travel or other pertinent documents from workers for reasons other
than those authorized under existing laws and regulations:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
7. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
8. Appointing or designating agents, representatives or employees without prior approval from
the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
9. Falsifying or altering travel documents of applicant worker in relation to recruitment activities:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
10. Deploying workers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
11. Deploying workers to principals not accredited/registered by the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
3rd Offense — Cancellation of License
12. Withholding of workers‟ salaries or remittances without justifiable reasons or shortchanging
of remittances:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of immediate release of the salaries or
remittances being claimed.
13. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense —- Cancellation of License
14. Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, where deployment does not take place without
the worker‟s fault:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of immediate refund of expenses incurred by the
worker.
15. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
workers:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
16. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
21
3rd Offense — Cancellation of License
e. Less serious offenses in the recruitment of seafarers.
1. Engaging in acts of misrepresentation in connection with recruitment and placement of
seafarers, such as furnishing or publishing any false notice, information or document in
relation to recruitment or employment:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
2. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or their
duly authorized representatives:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
3. Substituting or altering to the prejudice of the seafarer, employment contracts approved and
verified by the Department from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
4. Withholding or denying travel or other pertinent documents from seafarers for reasons other
than those authorized under existing laws and regulations:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty for immediate return of the documents
withheld.
5. Engaging in recruitment activities in places other than that specified in the license without
previous authorization from the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
6. Appointing or designating agents, representatives or employees without prior approval from
the Administration:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
7. Falsifying or altering travel documents of an applicant seafarer in relation to recruitment
activities:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
8. Deploying seafarers whose employment and travel documents were not processed by the
Administration or those agencies authorized by it:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
9. Deploying seafarers to principals not accredited/registered by the Administration or to
vessels not enrolled to the deploying agency:
1st Offense — Suspension of License (Two Months to Six Months)
 2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
10. Withholding of seafarers‟ salaries or remittances without justifiable reasons or
shortchanging of remittances:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of release of the salaries or remittances being
claimed.
11. Allowing persons who are otherwise disqualified to participate in the overseas employment
program under existing laws, rules and regulations to participate in the management and
operation of the agency:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
12. Failure to reimburse expenses incurred by the seafarers in connection with his
documentation and processing for purposes of deployment, where deployment does not
take place without the seafarer‟s fault:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
The penalty shall carry the accessory penalty of immediate refund of expenses incurred by the
worker.
13. Failure to comply with the undertaking to provide Pre-Departure Orientation Seminar to
seafarers:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year) 3rd
Offense — Cancellation of License
14. Non-compliance with any other undertaking in connection with the issuance or renewal of
the license:
1st Offense — Suspension of License (Two Months to Six Months)
2nd Offense — Suspension of License (Six Months and One day to One year)
3rd Offense — Cancellation of License22

f. Light offenses in the recruitment of land-based overseas workers and seafarers.

1. For the owner, partner, or officer/s of any licensed agency to become an officer or member
of the Board of any corporation or partnership engaged directly or indirectly in the
management of a travel agency:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
2. Inducing or attempting to induce an already employed worker to transfer from or leave his
employment for another unless the transfer is designed to liberate a worker from oppressive
terms and conditions of employment:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
3. Influencing or attempting to influence any person or entity not to employ any worker who has
not applied for employment through his agency:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
4. Failure to deploy a worker within the prescribed period without valid reason:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
5. Coercing workers to accept prejudicial arrangements in exchange for certain benefits that
rightfully belong to the workers:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
6. Disregard of orders, notices and other legal processes issued by the Administration:
 1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
7. Failure to submit reports related to overseas recruitment and employment within the
specified time as may be required by the Secretary or the Administration:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
8. Violation of other pertinent provisions of the Code and other relevant laws, rules and
regulations, guidelines and other issuances on recruitment and placement of workers for
overseas employment and the protection of their welfare:
1st Offense — Reprimand
2nd Offense — Suspension of License (One Month to Three Months)
3rd Offense — Suspension of License (Three Months and One day to Six Months) 4th
Offense — Cancellation of License
g. Money claims in addition to administrative penalties.
Money claims arising from recruitment violations may be awarded in addition to the
administrative penalties imposed.23
h. Imposition of fines.
In addition or in lieu of the penalty of suspension of license, the Administration (POEA) may
impose the penalty of fine which shall be computed at P10,000.00 for every month of suspension.24
i. Mitigating, aggravating or alternative circumstances.
In the determination of the penalties to be imposed, the following mitigating, aggravating and
alternative circumstances attendant to the commission of the offense shall be considered:
a. First Offender;
b. Admission of guilt and voluntary restitution, where applicable;
c. Good faith;
d. Exemplary Performance;
e. Recidivism;
f. Prejudice to the worker;
g. Gross negligence;
h. Other analogous circumstances.25
j. Cancellation of license, proper penalty for cases involving five (5) or more
complainants.
A respondent recruitment agency found guilty of committing an offense, regardless of the
number or nature of charges, against five (5) or more complainants in a single case shall be imposed
the penalty of cancellation of license.26
5. DISCIPLINARY ACTION CASES AGAINST FOREIGN PRINCIPALS/EMPLOYERS OF
LAND-BASED WORKERS AND SEAFARERS.
a. Grounds for disciplinary action against foreign principals or employers.
The following are the grounds for disciplinary action against foreign principals or
employers:27
a. Default on its contractual obligations to the migrant worker (or seafarer) and/or to its
Philippine agent;
b. Gross violation of laws, rules and regulations on overseas employment;
c. Gross negligence leading to serious injury or illness or death of the worker (or seafarer) ;
d. Grave misconduct;
e. Conviction of an offense involving moral turpitude;
f. Any other case analogous to the foregoing.28
b. Temporary disqualification of foreign principal or employer.
A foreign employer or principal against whom a complaint for disciplinary action has been
filed shall be temporarily disqualified from participating in the overseas employment program for land-
based overseas workers (or maritime employment program in case of seafarers) until the respondent
submits to the jurisdiction of the Administration (POEA) .29
c. Preventive suspension.
A principal or employer may be suspended from participating in the overseas employment
program pending investigation of the disciplinary action case when the evidence of guilt is strong and there
is reasonable ground to believe that the continued deployment to the principal or employer will result to
further violation or exploitation of migrant workers.
The Overseas Employment Adjudicator (OEA) shall, within sixty (60) calendar days from the
filing of the case, submit his findings and recommendations in the form of a draft order.30
d. Disqualification of foreign principals or employers.
Foreign principals or employers against whom the penalty of suspension or disqualification
had been imposed through an order, decision or resolution shall be disqualified from participating in
the overseas employment program for land-based overseas workers (or maritime employment program
in case of seafarers) unless cleared by the Administration (POEA) or the penalty imposed is lifted.31
2.
REGULATORY AND VISITORIAL POWERS
OF THE DOLE SECRETARY

1. TWO (2) SEPARATE PROVISIONS IN THE LABOR CODE.

As far as recruitment and placement of workers for local and overseas employment are
concerned, the Labor Code contains two (2) separate provisions on the regulatory and visitorial powers of the
DOLE Secretary, namely:
1. Article 36 - Regulatory Power; and
2. Article 37 - Visitorial Power.
2. REGULATORY POWER.
a. Article 36, Labor Code.
The regulatory power is embodied in Article 36, to wit:
“Article 36. Regulatory Power. - The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement activities of all agencies within the
coverage of this Title and is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions of this Title.”
b. Nature of regulatory power.
The power to regulate and restrict the recruitment and placement activities of all agencies
conferred by Article 36 to the DOLE Secretary is a valid grant of police power.32
Being regulatory, the DOLE Secretary may validly issue rules and regulations restricting or
otherwise regulating the recruitment and placement activities of persons and entities engaged in the
recruitment and placement of workers locally or overseas.
c. Exercise of the regulatory power.
Pursuant to Article 36 and in accordance with other pertinent and related provisions of the
Labor Code, the DOLE Secretary has issued several implementing rules, circulars, guidelines and
regulations.33
3. VISITORIAL POWER.
a. Article 37, Labor Code.
The visitorial power is found in Article 37, viz:
“Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises, books of accounts and records
of any person or entity covered by this Title, require it to submit reports regularly on
prescribed forms, and act on violation of any provisions of this Title.”
b. Distinctions of the visitorial powers of the DOLE Secretary under Articles 274 and 128
of the Labor Code.
The visitorial power of the DOLE Secretary or his duly authorized representatives described
in Article 37 of the Labor Code should be distinguished from the other visitorial powers granted to him
by other provisions of the Labor Code such as the ones provided for under Article 128 and Article 274
thereof.
Here, the visitorial power pertains to the inspection of the premises, books of accounts and
records of persons and entities engaged in therecruitment and placement of workers
for local or overseas employment. It also includes the power to require the submission of reports
regularly on certain prescribed forms and to act on any violation of Title I, Book I of the Labor
Code.34
The visitorial and enforcement power of the DOLE Secretary or the DOLE Regional
Directors, his duly authorized representatives, treated inArticle 128 pertains to the inspection of
premises, books of accounts and records of local employers to determine violations of the Labor Code
and any labor laws, wage orders or rules and regulations issued pursuant thereto.35
Article 274 dwells on the visitorial power of the DOLE Secretary to inquire into the financial
activities of legitimate labor organizations.
c. Effect of obstruction of exercise of visitorial power.
The act of any person, whether a non-licensee, non-holder, licensee or holder of authority, in
obstructing or attempting to obstruct inspection by the DOLE Secretary or by his duly authorized
representative under Article 37 of the Labor Code is one of the prohibited practices and unlawful acts
which constitutes “illegal recruitment.” 36
3.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
1. REMITTANCE OF FOREIGN EXCHANGE EARNINGS IS MANDATORY.
It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with
rules and regulations prescribed by the DOLE Secretary.37 It should be made through the Philippine
banking system.38
The obligation to remit is required to be stipulated in the following documents:
(1) Contract of employment and/or service between a foreign-based employer and a worker;
(2) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his
earnings to his beneficiaries;
(3) Application for a license or authority to recruit workers;
(4) Recruitment agreement and/or service contract between a licensed agency or authority
holder and its foreign employer or principal; and
(5) Application for accreditation of a principal or project.39
2. REASON WHY OBLIGATION IS MANDATORY.
Remittance to the Philippines of foreign exchange earnings of Filipino workers abroad is
necessary to protect the welfare of their families, dependents and beneficiaries and to ensure that their
foreign exchange earnings are remitted through authorized financial institutions of the Philippine
government in line with the country‟ s economic development program. Non-compliance with the laws
and regulations on remittance of foreign exchange earnings and recourse to the use of unauthorized and
unofficial financing institutions had led to the detriment of the country‟ s balance of payments and
economic development program. Consequently, it is imperative that the mandatory remittance
requirement be fully complied with by all concerned through the institution of appropriate remittance
facilities and the imposition of effective sanctions.40
3. COVERAGE.
This mandatory requirement applies to every OFW recruited and placed in overseas
employment. It also applies to licensed agencies and authority holders.41
4. AMOUNT OF FOREIGN EXCHANGE REMITTANCES.
The percentage of foreign remittance shall be as follows:
1. Seamen and mariners: Eighty percent (80%) of the basic salary;
 2. Workers of Filipino contractors and construction companies: Seventy percent (70%) of the
basic salary;
3. Doctors, engineers, teachers, nurses and other professional workers whose employment
contracts provide for free board and lodging facilities: Seventy percent (70%) of the basic
salary;
4. All other professionals whose employment contracts do not provide free board and lodging
facilities: Fifty percent (50%) of the basic salary;
5. Domestic and other service workers: Fifty percent (50%) of the basic salary;
6. All other workers not falling under the afore-mentioned categories: Fifty percent (50%) of
the basic salary.42
7. Performing artists overseas are required to remit at least fifty percent (50%) of their
monthly salary to the Philippines. 43
5. FORM OF REMITTANCE.
Remittance of foreign exchange may be done individually by a worker or collectively through
an employer under a payroll deduction scheme, to be approved by the DOLE.44
6. PROCEDURE OF REMITTANCE.
(a) The OFW, prior to departure, is required to open a deposit account for his mandatory
remittance in favor of his beneficiary in any Philippine bank. A foreign currency account may also be
opened by the worker to be funded by savings in excess of the mandatory remittance. The applicant should
inform the POEA of his deposit account number.
(b) In the case of seamen/seafarer, construction workers and other organized work crews
involving at least twenty five (25) workers, the foreign currency/peso account should be opened by the
employee with any Philippine bank upon the signing of the employment contract. The account shall be
accompanied by a covering letter of nomination of beneficiaries and the date of payment of the
allotment to the beneficiaries as may be stipulated by the employee and the licensed agency, manning
agency or construction contractor.
(c) At the end of every period as may be stipulated in the notice as payment, the licensed
agency, construction contractor or manning agent shall prepare a payroll sheet indicating the names of the
workers covered by the scheme, their beneficiaries, their individual bank account numbers, the amount of
foreign currency remitted and the peso equivalent thereof. This payroll sheet, together with the peso check
representing the remittance, shall be forwarded to the bank concerned with instructions to credit the account
of the worker or beneficiaries. A copy of the payroll sheet shall be furnished the POEA on a monthly basis.
(d) No local agent or representative shall pay directly the beneficiaries of the worker. The
agent or representative shall submit to the POEA copies of the reports which the bank may require him
to submit and payroll sheets on or before the end of the succeeding month of the payroll period
together with the bank credit advice evidencing remittance of foreign exchange.45
7. FAILURE OR REFUSAL TO REMIT AND TRAFFICKING IN FOREIGN CURRENCY.
A licensed agency, authority holder, or manning agent or a worker who wilfully fails or
refuses to remit the assigned portion of his foreign exchange earnings or is found to have engaged or is
engaging in the illegal traffic or blackmarket of foreign exchange, shall be liable under the Labor Code
and existing Central Bank rules.46
8. RESPONSIBILITY OF EMPLOYER OR HIS REPRESENTATIVE.
The employer or his representative shall undertake the proper implementation of the law,47 by
providing facilities to effect the remittance and monitoring of foreign exchange earnings. Failure to do
so shall be subject to appropriate sanctions specified in the Labor Code and regulations issued by the
Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) .48
9. OBLIGATION TO REPORT.
Agencies shall submit periodic reports to the Bangko Sentral ng Pilipinas on their foreign
exchange earnings, copies of which shall be furnished the POEA.49
10. NON-COMPLIANCE WITH THE MANDATORY REMITTANCE REQUIREMENT;
EFFECT ON ISSUANCE, RENEWAL AND EXTENSION OF PASSPORT.
Under the law,50 it is declared that no passport shall be issued, renewed or extended by the
Department of Foreign Affairs (DFA) unless proof of applicant ‟ s substantial compliance with the
mandatory remittance requirement in the percentages provided under the law is submitted.51
Passports issued to Filipino contract workers shall have an initial period of validity of one (1)
year. The DFA may, however, adjust, as circumstances may require, the initial passport validity
period.52
The passport shall be renewable every year upon submission of usual requirements and
presentation of documentary proof of compliance to the remittance requirement.53
11. “SUBSTANTIAL COMPLIANCE,” EXPLAINED.
The Inter-Agency Committee54 created to implement the law, clarified55 the foregoing effect of
non-compliance with the mandatory remittance requirement on the issuance, renewal and extension of
passport. Said Committee declared that in accordance with the normal duration of contracts of
employment and taking into account the provisions of some issuances56 mandating the DFA to adjust,
as circumstances may require, the initial validity period, passports issued to OFWs shall be valid for
two (2) years, renewable for another two (2) years, subject to compliance with the mandatory
remittance requirement.
An OFW shall be deemed to have substantially complied with the mandatory requirement if, at the time
he applies for renewal of passport or renewal of his employment contract during the period cited above, he
can show proof that he has remitted and sold for pesos at least one-half (1/2) of the amount of foreign
exchange corresponding to the mandatory remittance required of him.
The requirement to remit on a monthly basis need not be strictly applied during the initial period of
implementation provided that the amount remitted and sold for pesos through authorized financing
institutions shall at least be equal to one-half of the amount corresponding to the mandatory percentage
requirement defined under the Executive Order.
For example, if the salary of a contract worker is US$200 a month or US$2,400 a year, such
worker is required to remit 50% thereof or US$1,200 annually under the law.57 Pursuant to the
substantial compliance formula, a contract worker needs only to show proof that he has at least remitted
and sold for pesos 50% of US$1,200 thereof or US$600.00 a year.
The “substantial compliance” rule as defined, applies to contract workers remitting on an
individual basis. It does not apply to OFWs already remitting or who will be remitting under the
payroll system, or on a monthly basis.58
12. NON-COMPLIANCE WITH THE MANDATORY REMITTANCE REQUIREMENT,
EFFECTS.
a. On accreditation of employer, issuance of license or authority and approval/renewal of
contracts of employment.
No accreditation shall be issued to an employer, and no license or authority shall be granted to
an agency or entity by the DOLE unless they submit proof that they have provided facilities to effect
the remittance of foreign exchange earnings of Filipino workers under their employ.59
No contracts of employment and/or service agreement shall be approved or renewed by the
DOLE unless proof of compliance with the mandatory remittance requirement is submitted.60
b. On the OFW.
An OFW who fails to comply with the mandatory remittance requirement shall be suspended
or excluded from the list of eligible workers for overseas employment and in case of subsequent
violations, he shall be repatriated at his own expense or at the expense of his employer, as the case may
be.61
c. On foreign employers.
Foreign employers and/or their representatives who fail to comply with the law shall be
excluded from the overseas employment program.62
d. On private employment agencies.
 In the case of local private employment agencies and other similar entities, their failure to
comply with the mandatory remittance requirement shall be a ground for cancellation of their authority
to recruit workers for overseas employment without prejudice to their liabilities under existing laws
and regulations.63
13. CONFLICT IN MANDATORY REMITTANCE REQUIREMENT AND HOST
COUNTRY’S REGULATIONS ON THE MATTER.
Should there be a conflict in complying with the mandatory remittance requirement in view of
the host country‟ s regulations on the matter, the percentages of remittance shall be, within allowable
limits, set down by local laws.64
14. EFFECT IF BENEFICIARIES ARE LIVING WITH OFWs ABROAD.
An OFW whose immediate family members, dependents or beneficiaries are residing with
him abroad, is not compelled to comply with the mandatory remittance requirement except if the
dependents themselves are contract workers, subject to verification of his family status by the DFA
and/or DOLE. He should be encouraged, nevertheless, to remit a portion of his foreign earnings to the
Philippines.65
15. PUNITIVE PROVISIONS OF EXECUTIVE ORDER NO. 857, REPEALED.
Executive Order No. 1021 [On Encouraging the Inward Remittances of Contract Workers
Earnings Through Official Channels] issued on May 1, 1985 by President Ferdinand E. Marcos, repealed
the punitive provisions of Executive Order No. 857.
16. ROLE OF EMBASSY AS CHANNEL FOR REMITTANCE.
The role of the Embassy66 is only temporary, in the absence of banking facilities in the jobsite
and pending the establishment of appropriate arrangements by the Bangko Sentral ng Pilipinas. In
exercising this function, the Embassy shall abide by customary local laws and regulations of the host
country.67
17. REMITTANCES OF OFWs, NOT DEEMED PERSONAL DEDUCTIONS FOR INCOME
TAXATION PURPOSES.
The obligations of OFWs to remit portions of their foreign exchange earnings under the
law68 are separate and distinct from the personal deductions defined under gross income taxation
laws.69

4.
PROHIBITED ACTIVITIES

1. PROHIBITED ACTIVITIES.
Besides illegal recruitment, the law70 additionally provides that it shall also be unlawful for
any person or entity to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per
annum, which will be used for payment of legal and allowable placement fees and make the
migrant worker issue, either personally or through a guarantor or accommodation party,
post-dated checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to avail of a loan only from specifically designated institutions, entities or persons;
(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the
latter's employment contract has been prematurely terminated through no fault of his or her
own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo health examinations only from specifically designated medical clinics,
institutions, entities or persons, except in the case of a seafarer whose medical examination
cost is shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo training, seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or persons, except for recommendatory trainings
mandated by principals/shipowners where the latter shoulder the cost of such trainings;
(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity
including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas
Filipino worker or deduct from his or her salary the payment of the cost of insurance fees,
premium or other insurance related charges, as provided under the compulsory worker's
insurance coverage.

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